LP Position NFTs

Each liquidity position provides an LP Position NFT, giving liquidity providers full control over their position. This NFT holds ownership of the fees and rewards accumulated within the given price range for the specific pool where liquidity is deposited. These NFTs are transferable, allowing holders to transfer ownership of the position or sell it on a secondary NFT marketplace.

Why is Liquidity Position Ownership Represented by Tokens or NFTs?

This approach is used because NFTs can store all the unique data associated with a liquidity position, such as the specific price range, the amount of tokens provided, and the fees accrued.