> For the complete documentation index, see [llms.txt](https://docs.tradoor.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.tradoor.io/tradoor-liquidity-provider.md).

# Tradoor Liquidity Provider

The Tradoor Liquidity Provider （TLP）absorbs all losses resulting from LP risk exposure until it is depleted. 

The TLP's income comes from 3 sources:

* A portion of transaction and liquidation fees (maintenance margin)
* Income from funding fees due to LP exposure
* The profits and losses of all traders
* The TLP's profit and loss rate x = TLP net value / TLP shares

TLP subscription:

* Non-leveraged subscriptions are allowed, with redemption available after locking for 10 days.
* If the TLP is not at a loss (x >= 1), the principal invested and subscription shares are 1:1.
* If the TLP is at a loss (x < 1), the loss rate is x, and the ratio of principal invested to subscription shares is 1:1,  and calculate a loss subscription incentive b = b + s(1-x) \* principal\_invested

where s is the TLP loss subscription incentive coefficient, with a default value of 1 and is configurable.

TLP redemption:

* If the TLP is at a profit (x >= 1),&#x20;
  * If b = 0,\
    Redemption Amount = redemption\_shares \* (1+r(x-1)\*min(n, 100)\*0.1%)
  * If b > 0,\
    Redemption Amount = redemption\_shares + max{min\[redemption\_shares \* (x - 1), b], redemption\_shares \* r \* (x-1) \* min(n, 100) \* 0.1%}

b = max(0, b - max{min\[redemption\_shares \* (x - 1), b], redemption\_shares \* r \* (x-1) \* min(n, 100) \* 0.1%})

* If the TLP is at a loss (x < 1),&#x20;
  * the redemption amount = redemption shares \* x
  * b remains unchanged

\* r is the TLP lock-in redemption incentive coefficient, with a default value of 1 and is configurable, up to a maximum of 10.

<br>


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