> For the complete documentation index, see [llms.txt](https://whitepaper.karmatoken.org/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://whitepaper.karmatoken.org/karmas-features/auto-liquidity.md).

# Auto Liquidity

## Auto Liquidity

One of the biggest issues cryptocurrencies face is the acquiring of liquidity. Most liquidity in the current phase of DeFi is done through farming. Users provide their tokens as liquidity in exchange for a percentage of some of the exchanges trading fees for the pair the user provides. The model fails once users pull their liquidity after rewards are no longer attractive. With Karma, this risk is mitigated by the auto liquidity feature of the token smart contract. \
\
As mentioned earlier, the Karma token smart contract charges a fee on every transaction. It then deposits the realized fees in the liquidity pool indefinitely. It also purchases an equal value to BNB using its in-built analytic algorithm to determine the better option at the particular time, and adds the funds to the locked liquidity pool. The aim is to ensure market solvency as well as maintain a rising price floor by default. 


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