Underlying Token
The underlying token is the cryptocurrency that the Liquidity Note is designed to support by increasing its market liquidity.
Project Contribution: The cryptocurrency project will typically contributes a certain amount of the underlying token from its treasury to underwrite the liquidity note.
Liquidity Pair Formation: The underlying token forms one half of the liquidity pair in the liquidity pool (the other half being the pay token).
Impact on Investment: The performance of the underlying token affects the value of the Liquidity Note, influencing potential upside gains and the activation of downside protection.
Last updated
Was this helpful?