LP Token
DeFi
Token representing a share of a liquidity pool.
An LP token is created when you add liquidity to a pool and destroyed when you withdraw. It tracks your share and claims on fees earned by the pool.
Frequently asked questions
How do LP tokens work?
They are minted when you deposit into a pool and burned when you withdraw, tracking your share and fees.Can LP tokens be used elsewhere?
Yes. Many protocols accept LP tokens as collateral or for farming. Understand stacked risks.What happens if the pool changes?
Your LP token reflects the pool’s current state, including fees earned and any impermanent loss.