In the above example, the user creates a BNT/DAPP pool with an equal value of BNT & DAPP tokens. This pool can now:Receive BNT & DAPP tokens from liquidity providers and mint BNTDPP Pool Tokens. Generate fees from DAPP trades that increase the price of BNTDPP Pool Tokens. Users can burn their BNTDPP to withdraw their liquidity and realize gains.
Pool Tokens are not risk-free assets. They can drop in price due to volatility in the trading pair. So long as accumulated trading fees are greater than any impermanent loss, the Pool Token holder profits.
Keep an eye out for xNation to support Ethereum pool creation & staking, ROI data for every pool on Bancor, & more!