# Liquidity Pools

# Exchange V2

# LP Tokens

As an example, if you deposited ZIL and ZUSDT into a Liquidity Pool, you'd receive ZIL-ZUSDT LP tokens.

The number of LP tokens you receive represents your portion of the ZIL-ZUSDT Liquidity Pool.

You can also redeem your funds at any time by removing your liquidity.

# Earning trading fees

Whenever someone trades on PlunderSwap, for each hop (swap) in each liquidity pool, the trader pays a fixed 0.35% fee, of which 0.20% is added back to the Liquidity Pool in a form of trading fees. The remaining 0.15% fee is sent to the Plunderswap treasury to keep the vessel sailing smoothly into the future!

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# Impermanent Loss

Providing liquidity is not without risk, as you may be exposed to impermanent loss.

“Simply put, impermanent loss is the difference between holding tokens in an AMM and holding them in your wallet.” - Nate Hindman