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Handling Liquidity

Providing Liquidity

If the DAO wants to add liquidity to the liquidity pool, it orders the treasury to mobilize BUSD (or another pool token) and mint the corresponding MFI tokens and send them to the official liquidity pool. In return, it receives LP tokens that are stored in the treasury.

Removing Liquidity

If the DAO wants to remove liquidity from the liquidity pool, the treasury sends LP tokens to the pool and in return, it receives the corresponding amount of BUSD and MFI (or another pool token). Upon receipt, the BUSD is stored in the treasury and the MFI tokens are burned.

Locking Liquidity

To provide greater security and comfort to the MetFi community and any individual holding or trading MFI tokens, the community may from time-to-time vote and choose to lock some of the treasury’s LP tokens into a smart contract for a pre-determined period. When LP tokens are locked the treasury cannot access them and neither can a developer. The treasury is also unable to send the LP tokens to the liquidity pool and remove liquidity, ensuring that a ‘rug pull’ cannot occur for as long as the LP tokens remain locked.

Locking liquidity is a tradeoff as there is then no way to remove liquidity from the liquidity pool in situations where it would be desirable to do so e.g. if a hack were to occur removing liquidity would make it impossible for the hacker to sell the stolen tokens.