🏦Market making Vault - ELP

Market making Vault - ELP

ELP overview

The Ethora liquidity pools (ELP) offer market-making liquidity for options trading. When you purchase an option, a certain amount of liquidity is locked up to ensure smooth trading.

To show our appreciation for ELP depositors who provide market-making liquidity, Ethora rewards them with the majority of the collected fees, along with other benefits. When you buy an option, a settlement fee is charged based on trading volume and payout. This fee is then sent to the pool, and the corresponding liquidity is locked up.

• If traders win (positive PnL), winnings will be paid out from the vault.

• If traders lose (negative PnL), losses will be transferred to the vault.

In return, the vault receives a portion of the fees. These fees are divided between liquidity providers and ETR stakers in a fair manner, encouraging stakers to continue participating in the vault.

Benefits for Liquidity Providers

USDC-based ELP: earns collected fees distributed in USDC