# Pool Creation

A pool on Timeswap is first initiated by a Liquidity Provider who sets the initial parameters for the pool. The Pool creator also adds the initial liquidity to bootstrap the market. A liquidity pool can be created for any pair of tokens.

Timeswap can have pools for multiple token pairs, each of which can have different pools with different strike price & maturity dates.

Here's how pools are uniquely identified:

**Token Pair:**Defined as Token A/TokenB. (For example: ARB/USDC in the above image.)**Maturity Date:**The date and time at which the pool expires. (For example: 29th September | 17:30:00)**Transition price:**The price level at which borrowers are expected to change their actions (whether to repay or to default on their loans). (For example: 1.60 ARB/USDC)

Now that we understand the Liquidity provider well, it won't be difficult to grasp the pool creator.

**Step 1: The Parameters.**

**Step 1: The Parameters.**

Suppose a Liquidity Provider wants to create USDC/ETH pool with the following parameters:

Interest rate (I): 10% APR

Transition Price (TP): 1000 USDC per ETH

Duration (d): 1 Year

**Here are some ratios and parameters we would need to create the pool: **

$ETH:USDC = 1:1000$

$I=Z/(X+Y)=10/100=(10/100)/d$

Where** I **is the annual marginal interest rate
= 10% annually
= 10/100 annually
= 1/10

Interest rate per second = (10/100)/d per second (where** d** is the duration of the pool)

Therefore,
$dZ/(X+Y)=1/10$
$dZ:(X+Y)=1:10$
Where **dz** is the Interest Amount and **(x+y)** is the amount of tokens available for borrowing.
$d=31557600$(seconds in 1 year which is the pool maturity in our example)

**NOTE: **Liquidity Providers can add any amount of tokens by maintaining Marginal Interest **'I'** or $Z:(X+Y)$ ratio.

Depending on the state of the pool, LPs add either ETH (when K>S) or USDC (when S>K). Let's look at both cases.

### Step 2: Create Pool.

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