# Liquidity

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The smart contract where assets are deposited is called a liquidity pool. A liquidity pool consists of a pair of two cryptocurrencies deposited together. Participants in the ecosystem, known as Liquidity Providers, deposit assets into the desired pool. Assets can be deposited in the form of paired tokens, which are tied together in the same way as he assets in the liquidity pool. The exchange rate of assets and the deposit ratio of pair tokens are determined based on the reserved amount of assets in the liquidity pool. By providing liquidity pool, users receive LP tokens, which represent their share of the total pool.

During the asset deposit period, users have the opportunity to receive fees paid by other users for exchanging assets in the pool. If a user holds KSTA and LOUI and wises to deposit assets into the liquidity pool, they can deposit KSTA and LOUI according to a desired proportion and reveive KSTA-LOUL LP tokens in return. Upon deposit, an equivalent value of each asset will be supplied based on their current market prices within the Atheneswap contract pool, rather than external exchange prices. For example, if the prices of KSTA and LOUI are $1 and $2 respectively, a user who wants to deposit 100 KSTA would deposit an equivalent of $100 worth of KSTA and would also need to deposit 50 LOUI to match the same value.

Rewards are distributed from the moment the liquidity provision is completed, and the supplied liquidity can be withdrawn at any time. Upon withdrawal, users receive rewards along with their LP tokens. The quantity of assets supplied as liquidity and the quantity of assets received upon withdrawal may vary due to price fluctuations of cryptocurrencies.


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