Pool Creation

Create a new pool, set initial ratio, and add liquidity; token burn requirement.

On BEX, you can initialize a liquidity pool for an arbitrary pair of tokens. When you initialize the pool, you can select the starting price ratio between the two tokens.

You can create new BEX liquidity pools here: https://bex.berachain.com/pools/create

To prevent spam and ensure the creation of meaningful pools, BEX requires you to permanently burn a small, economically insignificant quantity of both tokens when initializing a new pool.

Pool initialization steps

1. Navigate to pool creation

   Navigate to the “Pool” section of the BEX app and select “Create a Pool”.

2. Select tokens

   Select the two tokens you wish to create a pool for.
3. Specify pool fees

   Specify the pool fees, collected on each swap.
4. Set ratios and liquidity

   Set initial pool token ratios and amount of liquidity to add.

5. Confirm the transaction

   Confirm the pool creation transaction.

Selecting the ratio

During pool creation, the price/ratio of the tokens is set based on amount of “quote” tokens per “base” token. Using the above scenario as an example, and assuming that the price of $WETH is $3000, the initial price of `$HONEYis set from the initial3000` ratio, that is:

• Each $WETH is worth 3000 $HONEY
• Each $HONEY is worth 0.000333 $WETH
• The initial price of $HONEY is $3000 * 0.000333 = $1

If there is a known price to both tokens, you should try to set the initial price ratio to match the known prices. If the price ratio is set too high or too low, arbitrageurs will quickly correct the price to match the market.