Description
Terraswap is a Uniswap-inspired automated market-maker (AMM) protocol implemented with smart contracts on the Terra blockchain. The protocol enables a decentralized on-chain exchange for various assets involved in the Terra ecosystem. Users can participate in Terraswap as traders, liquidity providers, or both. A trader can exchange their tokens for other tokens through Terraswap using the price determined by the liquidity pool ratio. A liquidity provider adds equal value of two assets to their corresponding Terraswap pair pool, increasing the liquidity for the corresponding pair market while maintaining the pool price. In this process, liquidity providers are rewarded by newly minted LP tokens. LP tokens represent the liquidity provider’s share in the pool and provide the benefit of earning trading fees, which are accumulated into the pool on every swap transaction. Liquidity providers can burn their LP tokens to withdraw their share from the pool. The Terraswap Web Application is the official web front-end interface for swapping Terra native tokens and CW20 tokens.