💡Liquidity

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Liquidity

ALP (Axion Liquidity Pool) is the liquidity provider token for Axion Perpetual. Liquidity providers earn rewards from leverage trading, borrowing fees, and swap fees.

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Overview

ALP represents a basket of assets used for swaps and leverage trading. You can mint ALP using any supported index asset and burn it to redeem any asset in the index. The mint/redeem price is calculated as:

(Total value of index assets including PnL from open positions) / (Total ALP supply)

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ALP Token Addresses

• Taiko: 0xb5fBf03E180D0ee077E3d547f184B024C9f6E9D6

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How ALP Works

Because ALP provides liquidity for leverage trading, ALP holders profit when traders lose, and vice versa.

• Historical PnL, price charts, and stats: Axion Stats

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Buying ALP

You can purchase ALP from the Buy ALP page.

• Funds can be bridged as needed (bridging options provided on the Buy page).

• Any index asset can be used to mint ALP—available assets are listed on the Dashboard.

• Fees are lower when minting with underweighted assets (see Save on Fees for optimization).

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Selling ALP

You can redeem ALP on the Sell ALP page.

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Token Pricing

• Some index tokens may have spreads.

• Minting is priced on the lower value of the token, and redemption on the higher value.

• Stablecoins are priced based on their Pyth PriceFeed relative to $1.

• ALP price is also affected by the spreads and composition of the index pool.

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Token Weights

• Fees vary depending on how your action affects pool balance.

  • Increasing an already overweighted token incurs higher fees.

  • Reducing an overweighted token incurs lower fees.

• Token weights adjust dynamically to hedge ALP holders against trader exposure:

  • If traders are long ETH → ETH gets higher weight.

  • If traders are short → stablecoins get more weight.

• If token prices rise, ALP value rises even with long exposure, since profits are used to pay traders.

• If traders are heavily shorting assets like ETH, ALP effectively gains synthetic exposure to ETH:

  • If ETH rises → ALP benefits from short trader losses.

  • If ETH drops → ALP value falls due to pool loss.

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Risks

Interacting with smart contracts carries inherent risk. Though audited and tested, no system is completely immune to bugs.

Potential Risks Include:

• Smart Contract Risk – Bugs or exploits in contract code

• Counterparty Risk – Traders’ profits come at the expense of the ALP pool

• Token Risk – Risks associated with bridged assets or stablecoin depegging