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Pool shares

When you add liquidity to a price market, the pool mints internal shares for your liquidity lot. Those shares track your claim on the shared collateral pool. The value of a lot depends on total active collateral, total pool shares, fees, trader P&L, and pool state. Trader positions are not valued by pool shares. Their value is computed from price, leverage, and the pool-level psi adjustment (see Technical details). LP lots and trader positions are tracked separately, but both draw from the same active collateral base.

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Liquidity lots

Each liquidity deposit creates or updates a lot. A lot tracks owner, share balance, fee-sharing status, and lock timing. Liquidity is not the same as a trader position. LP lots do not have long or short direction, but they are exposed to the pool’s aggregate performance.

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Fee pool participation

Some price markets support optional fee sharing. If you opt in, the system can mint a non-transferable fee-share token that tracks reward rights for that lot. Joining or increasing a fee-sharing lot may reset or extend lock timing. Check the app before assuming a lot can be removed immediately. Fee sharing is not automatic for every LP lot. Rewards depend on the market’s fee modules, the configured LP fee share, and whether your lot has opted into the fee pool.

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What your liquidity is worth

LPs are the counterparty to traders — effectively the house. A lot’s redeemable value is not fixed at the amount you deposited. When you remove liquidity, the pool converts your lot back to collateral at the current pool state (the live psi), so:
  • If traders are losing in aggregate, the pool’s collateral base grows and your redeemable value can be above your deposit.
  • If traders are winning in aggregate, the pool’s collateral base shrinks and your redeemable value can be below your deposit — you can lose principal.
  • Any single redemption is capped by the pool’s available collateral, and in a fully drained pool a withdrawal can return zero.
When a market enables funding, trader-paid funding also accrues to active LP lots, adding to what your lot can redeem — on top of any fee-pool rewards.

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Drained pool: deposits also pause

A drained pool (no active collateral while shares are still outstanding) doesn’t just affect withdrawals — it also blocks new deposits. While the pool is in this state, addLiquidity reverts (PoolDrainedWithActiveShares), so new LPs can’t enter until the residual share holders exit and clear the pool. Apps can detect this up front with the isDrainedWithActiveShares lens view.

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Scheduled closures also pause deposits

On a market bound to a trading calendar, addLiquidity and addLiquidityTo are rejected while the market is scheduled closed and during the reopen grace window, under the same new-risk gate that blocks new positions. Removing liquidity is never blocked by the schedule.

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Removing liquidity

Removing liquidity burns lot shares and returns the corresponding collateral at the current pool state, subject to lock rules. Fee-sharing lots are locked when you opt in and cannot be removed until the lock expires; adding to a fee-sharing lot refreshes the lock. The lock defaults to 1 day per pool and is bounded — governance can tune it but it must stay non-zero and at most 7 days. Previewing a removal mirrors the same rule: previewRemoveLiquidity reverts (FeePoolStillLocked) for a fee-sharing lot whose lock hasn’t expired, rather than quoting a withdrawable amount. A failed preview can simply mean the lot is still locked. If you have pending rewards, claim them through the reward flow before or after withdrawal depending on the app path.