# Swap Pools

Swap Pools provide token liquidity for swaps.

Providing liquidity to a Swap Pool is to a certain extend comparable to giving an earmarked (and thus self-overcollaterialized) loan to the Backstop Pool, which is doing market making on leverage with the Swap Pool liquidity (and the Backstop Pool liquidity as additional collateral). The Backstop Pool guarantees that Swap Pool liquidity providers can withdraw their deposited amount after a 1 block cool-off period (flashloan protection) at any time (not necessarily in the provided token, though)

Upon withdrawal from a Swap Pool with coverage ratio below 100%, the Swap Pool liquidity provider can choose to either withdraw their deposits in the provided token, accepting a small loss due to applied slippage - or to choose an "insurance withdrawal" through the backstop pool instead. In the latter case, the liquidity provider receive $USDC (or any surplus tokens of his choice) from the backstop pool at the nominal value of their current LP position, according to the oracle prices, minus a fixed "insurance fee" b (for most assets between 0.1% and 0.4%).


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