> 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

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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.

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[Binance Academy](https://academy.binance.com/en/articles/impermanent-loss-explained)
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