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Tokemak deploys protocol-controlled assets into providing liquidity on outside trading venues. TOKE stakers direct the liquidity and backstop the protocol in case of extreme protocol losses.
Liquidity providers lend assets to Tokemak in exchange for inflationary TOKE rewards. They are made whole by protocol reserve and TOKE stakers in case of extreme protocol losses.
It is unclear how Tokemak would combat impermanent loss incurred from providing passive liquidity.
Footnotes
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