Liquidity pool mechanismes

Before jumping into the SDeamon journey, make sure you fully understand how liquidity pools work.

LP = Liquidity Provider You become an LP when you deposit two tokens (like $S and $USDC or another token) into a pool on a decentralized exchange (DEX), such as Shadow Dex with the SDeamoniak Agent. This allows other people to trade between those tokens. You earn fees from every trade that occurs in your pool.

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CL = Concentrated Liquidity In older systems (like Uniswap V2), your tokens were used across all price ranges. With concentrated liquidity (as in Uniswap V3, used by Shadow DEX and most modern DEXs), you choose a specific price range in which your tokens will be active.

Example: You provide $S/$USDC liquidity only between $0.40 and $0.50. • If $S stays within that range, you earn trading fees. • If $S moves outside that range, your tokens are not used — you earn nothing until the price returns to your chosen range.

The SDeamoniak agent stands out because it actively manages your position, continuously keeping it within the optimal price range to maximize fees and reduce idle time.

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IL = Impermanent Loss This is a temporary loss you may incur when the price of one token changes significantly after you’ve added liquidity.

Why? Because the pool automatically adjusts how much of each token you hold. Typically, you end up with less of the token that increased in price. Even though you earn fees, you might still lose money compared to simply holding your tokens.