# Creating a pool

> Creating an ERG/token or token/token LithosDex pool, what it costs, what is locked for good, and what you get back.

Source: https://lithosprotocol.org/docs/lithosdex/creating-a-pool

**Level:** Advanced

*Assumes you know what a provision is and how a pool's price follows its reserves. Read [Providing liquidity](https://lithosprotocol.org/docs/lithosdex/liquidity) first.*

Any wallet can create a LithosDex pool, ERG against a token or two tokens, from the web interface or
the API. This page covers what creating a pool does, what it costs, and how to create one. Telling pools
apart once they exist is in [Choosing a pool](https://lithosprotocol.org/docs/lithosdex/pools).

## What creating a pool does

Creating a pool sends the following four transactions from your node wallet, in order:

1. Mint the pool NFT.
2. Mint the vault NFT.
3. Mint the NFT that owns your provision.
4. Send the genesis, which creates the pool, its vault and your provision.

Everything you put in becomes the pool's reserves, and the ratio of your two amounts sets the opening
price. The genesis gives you a provision for every share of the pool but a millionth. That millionth is
locked in the pool for good, so a millionth of each reserve can never be taken out.

> **Danger: The opening price is yours to get right**
>
> Anyone can trade against the pool once its genesis is in a block. If your price differs from the market
> price, the first trades buy the cheap side until the pool's price matches the market, and that
> difference comes out of your reserves.

## What it costs

Creating a pool charges no fee of its own. You pay the network fees on the four transactions, and the
new boxes hold the following ERG:

| Box | ERG it holds | Returned |
|---|---|---|
| Token/token pool | 6.3 ERG | Never |
| Token/token vault | 2.3 ERG | Never |
| ERG/token vault | 0.1 ERG | Never |
| Your provision | 0.6 ERG | When you redeem the provision |

An ERG/token pool box holds your ERG reserve and nothing more, so that ERG leaves as providers redeem.
The pool box must always keep over 0.01 ERG, so the reserve you put in must be at least 0.01 ERG.

**A full exit can leave a little behind.** Unless an ERG/token pool starts with more than 10,000 ERG,
its locked millionth is 0.01 ERG or less. While you are its only provider, redeeming everything then
leaves about 0.01 ERG in the pool, and its share of the token. The quote warns you when this applies.

## Choosing the fees

Each swap pays three fees, each a percentage of what the trader puts in:

| Fee | Default | Where it goes |
|---|---|---|
| Kept by the pool | 0.15% | Stays in the reserves, raising the value of every share |
| To providers, selling the first asset | 0.15% | Set aside for providers to claim |
| To providers, selling the second asset | 0.15% | Set aside for providers to claim |

The defaults match ERG:LIT. Each fee may be any percentage from 0 up to, but not including, 100. A
pool's fees never change after its genesis.

## Creating a pool from the web interface

Creating a pool spends your wallet's funds, so the interface needs the client's API key, entered under
**Settings**. To create a pool, follow these steps:

1. Open **LithosDex**, then the **Pools** tab, and select **Create a pool**.
2. Choose **ERG / token** or **Token / token**.
3. Pick each token from your wallet, and enter how much of each goes into the pool.
4. Select **Fees** to change the split, if you want to.
5. Read **What creating it does**: the opening price, your provision, the share locked for good, each
   box's ERG, the network fees and what leaves your wallet.
6. Read any warnings under the quote, such as a pool that already trades the same pair.
7. Tick **The pool's boxes and the locked share can never be taken back.**
8. Select **Create pool**.

The token lists show what your wallet holds, verified tokens first. Check each token id before you
create the pool, since an unverified token's name was chosen by whoever minted it.

## After you send it

The result lists each of the four transactions as accepted or unsent:

- **All accepted.** The pool appears in the pool list once its genesis is in a block. The result names
  the NFT that owns your provision. Keep it: whoever holds it owns the provision.
- **One not accepted.** The client sends none of the later transactions and gives back the wallet boxes
  it held for them. NFTs already minted stay in your wallet and do nothing on their own. Create the pool
  again to start over.

A new pool is **Unverified** until a client release adds it to the verified list. Traders must consent
before trading on it, as [Choosing a pool](https://lithosprotocol.org/docs/lithosdex/pools#trading-on-an-unverified-pool) describes.

## Creating a pool through the API

`POST /dex/pools/create/check` returns the quote, and `POST /dex/pools/create` sends the four
transactions. Both need the API key. The request takes the following fields:

| Field | What it holds |
|---|---|
| `tokenX` | `ERG` for an ERG/token pool, otherwise the first token's id |
| `tokenY` | The other token's id |
| `amountX`, `amountY` | What goes into the pool, in raw token units. ERG is in nanoERG |
| `feeParams` | Optional. Fee numerators over a `feeDenom` of `10000`. Leaving it out takes the defaults |
| `acknowledgeLocked` | Required by `POST /dex/pools/create`. Must be `true` |

In `feeParams`, `dexFeeNum` is 10,000 less the share kept by the pool, and `ergFeeNum` and `tokenFeeNum`
are the provider fees on the first and second asset. The defaults look like this:

```json title="POST /dex/pools/create"
{
  "tokenX": "ERG",
  "tokenY": "TOKEN_ID",
  "amountX": "100000000000",
  "amountY": "5000000",
  "feeParams": { "dexFeeNum": 9985, "ergFeeNum": 15, "tokenFeeNum": 15, "feeDenom": 10000 },
  "acknowledgeLocked": true
}
```

See [Quote a new LithosDex pool](https://lithosprotocol.org/docs/api/check-ld-pool-create) and
[Create a LithosDex pool](https://lithosprotocol.org/docs/api/create-ld-pool) for every response field.

## Next steps

- [Providing liquidity](https://lithosprotocol.org/docs/lithosdex/liquidity): what your provision earns and how to close it.
- [Choosing a pool](https://lithosprotocol.org/docs/lithosdex/pools): how other traders see your new pool.