Providing liquidity
Liquidity providers deposit assets into a Yutu pool. Traders swap against that inventory, and LPs receive the pool spread after the fixed protocol cut.
Deposits and shares
A pool holds a base asset and a quote asset. Deposits can include either or both, depending on the inventory the LP wants to supply.
The pool mints shares against the value of the deposit. Those shares represent the LP's proportional claim on the pool's inventory.
Fee earnings
The effective spread begins at 6 basis points and can rise to 30 basis points as book age or volatility increases. Yutu takes a fixed 1 basis point of executed book value. LPs receive the rest.
| Effective fee | LP share | Protocol cut |
|---|---|---|
| 6bp | 5bp | 1bp |
| 15bp | 14bp | 1bp |
| 30bp | 29bp | 1bp |
The protocol cut doesn't increase with the risk adjustment. Each basis point above the fixed cut remains with LPs.
Withdrawals
Withdrawing burns LP shares and returns the same proportional slice of both raw assets held by the pool.
withdrawShares doesn't read a price feed. A missing market price can't
block an exit, and withdrawals remain available when trading or deposits
are paused.
The returned asset mix follows the pool's inventory at withdrawal time. It may differ from the mix originally deposited because swaps change the amount of each asset held by the pool.
Risks
LP returns depend on trading activity, the fees collected, and changes in pool inventory. Supplying liquidity carries market and contract risk. The pool's price and size checks reduce exposure to stale or thin order books, but they don't remove it.
Review Swaps to see how a trade consumes pool inventory and Hyperliquid depth.