LP Token and Pool Ownership

An LP token is a fungible SPL token representing your share of a pool's LP-owned assets. Deposits mint LP tokens; withdrawals burn them for a proportional share of the current basket. Each pool has its own LP token mint.

A regular token for DeFi

In Uniswap v3-style concentrated liquidity pools, an NFT represents an individual position with its own tick range. Coffer LPs share the pool's configuration and hold interchangeable tokens from the same mint.

You can transfer LP tokens like other SPL tokens. They can be integrated into vaults, lending markets, and other DeFi applications that support the pool's LP token.

In an RWA pool, the basket can contain tokenized equities such as AAPLx, NVDAx and TSLAx. The LP token gives exposure to that changing basket and its trading fees. The rights behind each equity token depend on its issuer; the SPL format itself does not make a token an RWA.

LP as a product

Planned: let pool creators customize their LP token's name, symbol and image, and choose the initial LP supply. This would let a project package its pool as a recognizable SPL product — including an RWA basket.

Choosing the initial supply sets its starting denomination: a basket valued at $100,000 divided into 10,000 LP tokens starts at an estimated $10 per LP. It does not fix a market price or create additional backing. Later deposits and withdrawals would still use proportional ownership.

These creation options are not available yet. Today, the first deposit computes the initial LP supply from virtual balances; the pool's display name is separate from LP-token metadata.

Fees compound automatically

LPs' share of swap fees is automatically reinvested in the pool. It stays in the reserves backing LP tokens and participates in future trades, as in Uniswap v2 and classic Balancer pools. No fee claim or redeposit is needed: earned fees remain working capital inside your position.

Your LP token count stays the same; the retained fees become part of the assets it represents.

APY includes compounding; APR does not. For how the app annualizes recent fee income, see How Yield Is Generated.

Where fees are stored

Dynamic fees are recorded separately in swap events, but accrue to the same per-token protocol-fee counter as other protocol revenue. They are excluded from LP-owned actual_balance and cannot currently be claimed by LPs.

Planned: distribute dynamic fees to LPs with a separate claim mechanism. This would require new reward accounting; it is not part of current LP APY.

Your share stays a share; the basket can change

Holding 10% of the supply gives you approximately 10% of the pool's LP-owned balances, subject to withdrawal rules and rounding. Trades change that basket, and its market value can rise or fall.

Ownership and value

For raw LP token balance q, total supply S > 0, LP-owned raw reserves A_i, mint decimals d_i and token prices p_i:

ownership fraction = q / S
estimated position value = (q / S) × sum((A_i / 10^d_i) × p_i)

Use matching units for q and S. The pool's actual_balance already represents A_i; do not subtract protocol fees again. This valuation is not a quote to sell the position into one token.

Minting and burning

LP tokens use nine decimals. Read supply from their mint and your balance from your token accounts.

After the initial deposit, minting and burning use proportions of actual reserves and LP supply, with virtual balances scaled alongside them. These operations do not calculate a pool-wide invariant. The first mint currently does use a weighted invariant to establish the initial supply; it is a denomination, not a USD valuation. See Adding Liquidity and Removing Liquidity.

The program retains 1,000 raw LP token units, so a final withdrawal can burn less than requested. See Removing liquidity for the calculation.