# Becoming a Liquidity Provider

Users can become liquidity providers by depositing Bitcoin (WBTC on Solana) into the Crypta Liquidity Pool. In exchange, they receive Crypta Liquidity Pool tokens (**CLP**), which represent their ownership share of the pool.

This is not a risk free investment as the bankroll will fluctuate, however, over the long-run the bankroll will benefit from the house edge and the value of the pool will grow. This allows liquidity providers to take advantage of the house edge and earn a yield on their Bitcoin exposure, which would otherwise be unproductive capital. 

Users can provide capital to the Bankroll to receive the following BLP tokens:

$$
FX\_{rate} , = , \frac {Net:Asset : Value}{BLP : Supply}
$$

$$
BLP : Tokens : Received , = , \frac {Bitcoin : Deposit}{FX\_{rate} : \* : (1+Dilution , Fee)}
$$

Users can withdraw capital from the Bankroll at any time by burning their BLP tokens:

$$
Bitcoin : Received : = : BLP : Tokens \* FX\_{rate}
$$

### Dilution Fee

To protect existing liquidity providers from dilution, new deposits are subject to a 1% dilution fee. 

The dilution fee prevents:

* Users from exploiting the earnings structure by trading in and out
* Rewards long term participants for sustaining liquidity
* Creates fair value preservation for early entrants.


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