# Creating a liquidity pool

## Creating a CPMM pool

On CPMM (Constant Product Market Maker) pools, instead of trading between buyers and sellers, users trade against a pool of tokens — a liquidity pool. Follow the steps below to create a CPMM pool on ION Finance.

1️⃣ **>>Creation+** - After connecting your wallet, navigate to <\<Earn>> and click on <\<Creation+>> as shown below.&#x20;

<figure><img src="https://lh7-us.googleusercontent.com/QfiA1PZxcGmrZyeL1RH2sLtahMNJOUfMbmMJPv-rfeaCFej6uBgoLz0Nt5ryUiEOw4oVw6Z_dPsIlKB4y_29mpD7e0PjHEMrSLsYsCLZaCT1zyVblcBuJRHJA6vQorcfngOQqFH-KPAXQYJmyLbtN2k" alt=""><figcaption></figcaption></figure>

2️⃣ **>>Pool Type** - On this screen, you must select the Pool Type. Choose <\<CPMM Pool>> as shown in the pic, called simply as "Pool" and click <\<Next>> to get started! 😁

<figure><img src="https://374070831-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FbBoYJ4c1csBMm9lH0iZ3%2Fuploads%2FoKiCBhRiUJkYQAdaEVvi%2FMWSnap472.png?alt=media&#x26;token=1e0fcbaf-f47a-416b-9fd9-5cd2ce77477d" alt=""><figcaption></figcaption></figure>

3️⃣ **>>Setting** - On this screen, you will be able to choose the base and quote tokens the input the incurring fees

**a) Select base and Quote tokens** - The <mark style="color:purple;">Base Token (Token A)</mark> is the first one listed when you see a token pair. The second one is called the <mark style="color:purple;">Quote Token (Token B)</mark>, and it tells you how many you need to buy one Base Token.

<figure><img src="https://lh7-us.googleusercontent.com/HNa5VAASWFx4PZyeKtkeJiiKCCtlo8jYmAryGqW43as9Q0msSB8xDnTykbVBNreSrg8GnJWWWWPN9E9_1uS3ddB3JxR4s4cTztoWRkjuX1qNf3glycm68gi4vQ4TD5gu2Q3ymTSglozuDZbzOizWQOo" alt=""><figcaption></figcaption></figure>

**b) Input fee rate** - it is the amount that traders will pay to trade the pair, it is charged on each swap. Be aware that if the fee is too high the pool may experience low volume and consequently generate lower fees.  <mark style="color:green;">Liquidity providers earn 100% of token emissions and 84% of trading fees, with 12% and 4% of fees allocated to ION’s buybacks and treasury, respectively.</mark>&#x20;

<figure><img src="https://lh7-us.googleusercontent.com/x-dCVIk9YvlcaJC2vGaut0se13kg91ECL_c_kz2cmdu4q1gTAfAzDR-uPw4rt6wRrPlvvBud4Cu_1lgeOaIKs7OUxss8l6wljnsPA8Oaa3WMlmaBzZ_ukTIUw7xH-Qqpoq2o48XO53r4zrS7B6JgHbg" alt=""><figcaption></figcaption></figure>

**Fee Tiers:** Pool creators can choose from 3 fee tiers

0.01% - best for very stable assets (ex. USDT/BUSD)

0.3% - best for most pairs (ex. BTC/ETH)

1% - best for exotic pairs

4️⃣ **>>Liquidity** - In this screen, you need to decide the deposit amount to deposit into the liquidity pool. The deposit amount is the sum of Base and Quote tokens allocated for adding liquidity when the pool starts. <mark style="color:green;">This deposit proportion adjusts automatically, based on the prior settings.</mark> However, the pool creator has the option to adjust manually the amount of liquidity for both the Base and Quote tokens as needed. After adding liquidity by adding the tokens, click on <\<Create Pool>> to proceed.

<figure><img src="https://lh7-us.googleusercontent.com/gwzmZWnrOItuBMYjJOwBeyNPsVglXUATBLGVPUwDDgqXcBTSTZsd3EukEnzJNaHcrm02PicanWM3Pm5WVb2zFl-Dconu68HkvaioWSDxCcto0BchaKvL4U3Gd1X2GIyyIi7AaLC7r1As7IwD_XuWwoA" alt=""><figcaption></figcaption></figure>

5️⃣ **>>Preview pool and confirm** - After setting the deposit amount, the pool creator can preview the pool. Simply tap <\<Confirm>> and approve the transaction! You've successfully created a constant product market maker on ION Finance! 🙌

<figure><img src="https://lh7-us.googleusercontent.com/UxXU1OuQQxrqqnl4cFm_JVSyvdseFRs3dpiJs0ot34QR70nx2SVhU5E9qGrRtKAScnKKnPmPBkmQQAew_7aXuMZqgCVpPh_mNB_D061wzToLAG7FKMlaVi1Z55voUldyJhiYmq6LOEOS3lL6jk_PozU" alt=""><figcaption></figcaption></figure>

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