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Assume there are 167,659,347 LQT tokens in the storage of the Liquidity Baking CPMM contract currently.

If I have 100,000 LQT (a made up amount for the same of this question), that means I own 0.0596447509723% of the value of both the xtz pool and tzBTC pool.

Because the subsidy is adding 2.5 xtz per block to the Liquidity Baking CPMM, we can say that 7200 xtz will be added per day.

We can then say that over the course of 6 months (180 days to keep it simple), the Liquidity Baking CPMM will receive 7200 * 180 xtz in total from the subsidy alone.

Does this mean that at the end of this 6 month period I would own 0.0596447509723% of that 1296000 xtz, or 772.99597260151 xtz?

Also, does my percentage ownership of the total xtz and tzBTC pool go down as more liquidity is added (and therefore more LQT is minted)?

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Does this mean that at the end of this 6 month period I would own 0.0596447509723% of that 1296000 xtz, or 772.99597260151 xtz?

Only if your share of the liquidity pools does not change in the meantime. If, for example, more liquidity providers join the pool your share will decrease so you will receive less than this.

You also risk impermanent loss.

Also, does my percentage ownership of the total xtz and tzBTC pool go down as more liquidity is added (and therefore more LQT is minted)?

Yes.

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  • Thanks, what is the formula to calculate how much my percentage ownership will decrease as more liquidity is added?
    – Whirlybird
    Sep 11 at 20:39

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