> For the complete documentation index, see [llms.txt](https://token.metasignals.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://token.metasignals.io/tokenomics/token-utilities/lp-token-benefits.md).

# LP Incentives

*LP Incentives are a planned mechanism. The values and parameters on this page are preliminary and subject to change before launch.*\
\
LP Incentives are designed to reward users who provide liquidity to MSIG trading pairs on decentralized exchanges. The resulting LP tokens can be staked in the vote-escrow system, alongside the option to stake MSIG directly.

### How it works <a href="#how-it-works" id="how-it-works"></a>

* Provide liquidity to an MSIG trading pair on a decentralized exchange.
* Stake the resulting LP tokens in the vote-escrow system.
* Receive standard vote-escrow rewards plus additional LP-specific incentives.

### Two protocol reward streams <a href="#two-protocol-reward-streams" id="two-protocol-reward-streams"></a>

1. **Standard vote-escrow rewards:** The same rewards available to MSIG stakers.
2. **Additional LP rewards:** Incentives from the dedicated Community pool, currently described as approximately 8% of total supply.

The structure is designed to encourage liquidity provision and support MSIG trading liquidity.

### DEX swap fees <a href="#dex-swap-fees" id="dex-swap-fees"></a>

Liquidity providers also earn a share of DEX swap fees from trading activity. This is a third reward stream, separate from the two protocol reward streams and outside the Meta Signals tokenomics system.

LP providers receive **dual rewards**: standard staking rewards plus additional LP-specific incentives from the dedicated 8% Community pool allocation.

In addition to these staking rewards, LP providers also earn a share of DEX swap fees from trading activity, creating a third reward stream outside the Meta Signals tokenomics system.

{% hint style="info" %}
For complete LP staking mechanics, see [Staking LP Tokens](/tokenomics/vote-escrow-governance/staking-lp-tokens.md).
{% endhint %}