> For the complete documentation index, see [llms.txt](https://docs.dgswap.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.dgswap.io/products/pools/v2.md).

# V2

<figure><img src="https://2908584533-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FcOEar5iisPYFCTK06GBj%2Fuploads%2FNN2n5a0V6uxrr81qsBCQ%2Fimage.png?alt=media&amp;token=fc55b8dd-26be-4838-9acf-61caab789d95" alt=""><figcaption></figcaption></figure>

DragonSwap V2 pools are built on the Uniswap V2 model, allowing decentralized liquidity provision and earning opportunities.

### Liquidity Provision & LP Tokens

By depositing assets into a liquidity pool (e.g., KAIA - USDT), users receive LP (Liquidity Provider) tokens, representing their share of the pool. When withdrawing liquidity, users redeem LP tokens and receive their assets along with earned fees.

### Earning Fees

A 0.3% trading fee applies to swaps using V2 pools, distributed as follows:

* 0.24% to liquidity providers
* 0.06% to DragonSwap’s treasury for platform maintenance

### Understanding Impermanent Loss

Liquidity providers should be aware of impermanent loss, which occurs when the value ratio of deposited assets changes compared to the time of deposit.

{% hint style="info" %}
[Binance Academy](https://academy.binance.com/en/articles/impermanent-loss-explained)
{% endhint %}