Trying to act like I know about DEX @orca_so @MMTFinance: Where does the interest come from? So far, we have briefly looked at tokens, swaps, and liquidity provision. I mentioned that liquidity provision is the act of lending money to the exchange's vault. So, what exactly are these liquidity providers lending money for? To perform a swap at the exchange, you need to pay a fee. In the early days of DEX, a fee of 0.3% of the swap amount was the standard, but as the ecosystem has developed, fees can now be set in various ways. Generally, blue-chip tokens (like major coins or stablecoins...) tend to have lower fees. For example, Orca's SOL-USDC pool allows trading with a low fee of 0.04%. Momentum Finance's SUI-USDC pool can be traded with a fee of 0.175%. So how is this fee paid? The answer is that the fee is not paid upfront; instead, it is deducted from the amount received during the swap. For instance, if I swap $10,000 in a 0.3% pool, I will receive tokens worth $9,970. Now, what happens then? From the pool's perspective, the total amount of assets increases. Why? Because the pool received tokens worth $10,000 but exchanged tokens worth only $9,970 to the user, resulting in an increase of $30. And liquidity providers hold something called LP tokens, which I explained in a previous post, right? LP tokens represent a share of the pool's liquidity, and since the liquidity of the pool itself has increased, the amount of tokens that liquidity providers can claim has also increased. Therefore, when you provide liquidity to a pool with a lot of trading activity, the interest rates tend to be higher. I believe those who have participated in LP army activities on platforms like Meteor will understand this very well... I hope this opportunity helps you all understand the DEX ecosystem better!