KnightswapKnightswap: swaps and liquidity
KnightSwap is a decentralized exchange on BNB Smart Chain (BSC). Swapping exchanges one token for another. Providing liquidity contributes a pair of assets to a trading pool and gives you liquidity provider (LP) tokens representing a proportional pool share. KNIGHT farm rewards additionally require a farm that accepts those LP tokens and a separate stake in that farm.
Swapping uses the pool's liquidity
The documented trading flow uses a connected wallet without a separate exchange registration. Traders exchange assets against liquidity that other participants have supplied; making a swap doesn't give the trader an LP position.
KnightSwap's Exchange documentation lists a trading fee of 0.2% of the amount traded. For liquidity providers, the relevant allocation is 0.17% of that same traded amount, shared proportionately through the pool. The remaining 0.03% goes to the KnightSwap treasury.
An LP balance represents a pool share
LP tokens represent a percentage of the pool's two assets. Removing liquidity redeems the corresponding share of those assets at that point, so the claim isn't to fixed quantities of the tokens originally deposited.
An unchanged LP-token count doesn't mean that no trading fees have accrued. Fees are added to the pool's reserves; trading-fee accrual by itself doesn't increase the number of LP tokens that you hold. The documented fee entitlement continues whether those LP tokens are held in a wallet, deposited in a farm, or used in an auto-compounder.
Liquidity provision also carries impermanent loss risk: changes in the assets' relative prices can leave the liquidity position worth less than holding the deposited assets separately. Trading fees and any farm rewards may offset that difference, but they don't guarantee a profit.
Farming adds a separate reward source
A trading pair can support swaps and liquidity provision without having a KnightSwap farm. LP farming depends on a farm being available for the pair and on its LP tokens being staked there. Receiving LP tokens alone doesn't start that stake.
The farm distributes rewards in KNIGHT, while trading fees accrue within the underlying liquidity position. Staking the LP tokens adds the farm's reward mechanism and keeps the position exposed to the risks of supplying liquidity.
Before choosing a position
- Choose the swap function when the intended result is to exchange the input token for the output token without creating an LP position.
- Consider liquidity provision when you intend to supply both assets of a pair for a proportional trading-fee share and can accept impermanent loss risk.
- For KNIGHT farm rewards, confirm that a farm accepts the specific pair's LP tokens; an existing trading pair or an LP-token balance alone isn't enough.