Liquidity

The 1K Liquidity Pool (1KLP) constitutes a fundamental part of 1KX, providing essential liquidity for trading operations while offering a means for liquidity providers to generate yields. Here's a detailed breakdown of the 1KLP:

1KLP Token

1KLP serves as the liquidity provider token for 1KX, enabling liquidity providers to earn daily yields from trades and swaps conducted on the platform.

1KLP Liquidity Pool

The 1K Liquidity Pool is a diversified index asset pool, consisting of several ERC20 tokens. It operates as an index composition of assets in the basket, aiding liquidity providers in managing risk in the volatile digital asset market.

1KLP Mint and Burn

1KLP can be minted using any index asset and burnt to redeem any index asset. Transactions involving 1KLP incur fees ranging from a minimum of 0.15% to a maximum of 0.75%. Fees vary based on the token balance within the pool, with lower fees for actions that improve the pool's balance. A GUIDE IS NEEDED HERE.

Pool Structure and Target Weights

The current asset composition of the 1K Liquidity Pool and their target weights are as follows:

Asset	Target Weight

1KLP Pricing

The price of 1KLP is determined by the total worth of the Multi-Asset Index Pool divided by the supply of 1KLP tokens.

Risks Involved

Counterparty Risk: 1KLP token acts as the counterparty to all player transactions. If traders consistently profit, the pool's composition may temporarily lose assets, affecting the price of 1KLP.

Volatility Risk: The assets in the liquidity pool have volatile USD values, which may impact the price of 1KLP in the short term.

Smart Contract Risks: As with any smart contract-based system, there are inherent risks associated with vulnerabilities or bugs in the code. Users should exercise caution and perform due diligence when interacting with the 1KLP smart contracts.