How Liquid Tokens Work

A Liquid Token is a smart contract which acts as an automated market maker by regulating the buying and selling of a token along a predetermined price curve, with a single pool of collateral to back it up.

You’re essentially adding collateral when buying the Liquid Token, and reducing collateral when selling the Liquid Token.

Original source
https://hackernoon.com/how-liquid-tokens-work-a4ba30f2482b?source=rss----3a8144eabfe3---4

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