LP Token Price
LP token price represents the amount of Vault value attributable to one LP share. It changes with Vault economic results, while proportional deposits and withdrawals are designed to be price-neutral at execution.
Formula
LP Token Price = Total Liquidity / Total LP Tokens
What Moves LP Value
| Event | Typical effect |
|---|---|
| Borrow fee settles into Vault | Increases Vault value per LP share. |
| Trader closes at a loss | Can increase Vault liquidity. |
| Trader closes at a profit | Reduces Vault liquidity and can lower LP value. |
| Proportional deposit | Mints shares; designed to be neutral to existing LP price. |
| Proportional withdrawal | Burns shares; designed to be neutral to remaining LP price. |
Why LP Price Can Fall
The Vault is the counterparty to trader PnL. If profitable trader payouts outweigh fee income and trader losses, total liquidity can decline and LP share value can fall.
Where to Check
Use the live Vault page for the current LP price and Vault composition before depositing or withdrawing.