You can add any of the 16 tokens to DefiPlaza as liquidity. It does not have to be DFP2, so you don’t need to swap your tokens for DFP2 first to provide liquidity.
By adding liquidity to the exchange, you’ll receive the index token XDP2. This represents a share of the total liquidity in the exchange.
If you add a single token, this is internally modeled as if you added all 16 tokens and swapped them back to the token of your choice. This is very convenient and works well for smaller amounts. If you want to add larger amounts (> than 0.7% of TVL, or ~$5k at the moment) – see “I want to add larger amounts in liquidity“.
The XDP2 token collects fees over time. If you want, you can stake the XDP2 token and earn the governance token DFP2 which gives you voting rights for governance decisions. This means you’ll have a say in what tokens should be listed/delisted and what fees should be used on the exchange.
When you add liquidity with a single asset, you effectively buy and hold a bucket of all 16 tokens, so when the time comes to remove it it is subject to IL (Impermanent Loss).