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LP Vault FAQs
Common questions about token pairs, impermanent loss, lock-ups, fees, and Flux Points.
Do I need to provide both tokens in the pair? Yes. LP Vaults require both tokens in the pair. If you only hold one, you can swap half on QuickSwap before depositing. If you already have the LP token from adding liquidity directly on QuickSwap, you need to remove your liquidity so that you have the constituent parts. Unfortunately, we do not currently support adding the LP token directly.
What is impermanent loss? Impermanent loss occurs when the price ratio between your two deposited tokens changes. If one token appreciates significantly against the other, you would have been better off holding spot in that appreciating token versus providing liquidity. The "loss" is "impermanent" because it only crystallizes when you withdraw — if the price ratio returns to your entry point, it disappears. Trading fees earned while in the vault partially or fully offset IL depending on the vault's volume.
What happens when the price goes out of range? When market price moves outside the vault's active range, liquidity stops earning fees. The vault strategy will detect this and rebalance to a new range. During the period before rebalancing, your capital is still deployed in the vault but temporarily inactive.
Is there a lock-up period? No. Withdrawals are available at any time with no penalties.
How are fees charged? Fluxtra charges a performance fee on harvested yield before it is compounded. The exact fee percentage is shown per-vault in the app.
What's the difference between LP Vaults and just providing liquidity directly on the DEX? Providing liquidity directly means you manually manage your range, claim and reinvest rewards yourself, and pay gas for each action. LP Vaults automate all of this — active range management, compounding, and rebalancing — for a small protocol fee. For most users, the compounding efficiency and time savings outweigh the fee.
Do I earn Flux Points while in LP Vaults? Yes. All LP Vault positions earn Flux Points on top of trading fee yield. Check Fluxtra socials to make sure there is an active season for Flux Points.