Overview for Liquidity Providers

Provide liquidity to kVCM trading pairs to support access, receive a pro-rata share of trading fees generated on Aerodrome, and, where applicable, become eligible for protocol-defined incenti

Providing liquidity is a voluntary activity to support market operation. Liquidity provision is not an investment product and does not guarantee returns.

Overview

All carbon interactions within the Klima Protocol are mediated via the kVCM token.

To support efficient access and execution, liquidity is concentrated in two primary trading pairs:

• kVCM<>USDC: a stablecoin pairing that allows all users to enter or exit the ecosystem via dollar denominated settlement assets.

• kVCM<>K2: A protocol-token pair enabling conversion between kVCM and K2.

Liquidity for these pairs is hosted on Aerodrome a decentralised exchange on the Base network.

Any user holding the assets required for a given pair may provide liquidity.

1. Provide liquidity on Aerodrome only

Users may supply liquidity directly via Aerodrome’s standard interface without interacting with the Klima Protocol.

Liquidity providers receive a pro-rata share of trading fees generated by the pool.

kVCM<>USDC Pool:

• 0.3% fee per trade.

• 90% of fees distributed to liquidity providers (for unstaked positions).¹

If a user provides 10% of pool liquidity and the pool generates $1,000 in trading fees during a given period, the user would receive approximately $90, subject to pool mechanics and position status.

kVCM<>K2 Pool:

• 0.01% fee per trade

• 90% of fees distributed to liquidity providers (for unstaked positions)

_{¹ This assumes user positions are not “staked” on Aerodrome. User positions that are staked on Aerodrome will receive 100% of trading fees, denominated in Aerodrome's native AERO token instead of the principal deposit tokens, according to Aerodrome's own rules. Learn more.}

2. Provide Liquidity Through the Klima Protocol

Users may deposit eligible, unstaked Aerodrome LP positions into the Klima Protocol:

• Deposited LP positions remain on Aerodrome.

• Trading fees continue to accrue according to Aerodrome’s mechanisms.

• Deposited positions may become eligible for protocol-defined incentives, subject to predefined lock conditions and standard durations.

Summary:

• Trading fees are claimed via Aerodrome.

• Protocol incentives (if applicable) are claimed via the Klima interface.

• Incentive distribution follows deterministic, rule-based logic.

• Participation does not confer ownership rights, profit-sharing rights, or claims on protocol-held carbon.

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Risks

Providing liquidity involves material risks, including but not limited to:

• Token price volatility: Asset values may rise or fall.

• Impermanent loss: Divergence in token prices may reduce the value of a liquidity position relative to holding the assets separately.

• Smart contract risk: Liquidity positions rely on open-source smart contracts deployed on Base.

• Market risk: Trading volumes, liquidity depth, and incentive conditions may change over time.

• Regulatory risk: Participation may be subject to jurisdiction-specific requirements.

Participants should carefully assess these risks before providing liquidity.