The EggSwap exchange allows users to swap any ERC20/ERC644 token into any other ERC20/ERC644 token through automated liquidity pools.
The liquidity provided to the exchange comes from Liquidity Providers ("LPs") who stake their tokens in "Pools". In return they get ELP (EggSwap Liquidity Provider) tokens, which can also be staked in the "Farm".
When users make a trade on the exchange they pay a 0.3% trade fee.
0.25% of this trade fee goes to the Liquidity Providers who provide liquidity for that pool. It is added to the pool balance. If previously there were 100 SLP tokens representing 100 EXP and 100 LAB each token would be worth 1 EXP & 1 LAB. If one user trade 10 EXP for 10 LAV, and another traded 10 LAB for 10 EXP, then there would now be 100.025 EXP and 100.025 LAB. This means each LP token would be worth 1.00025 EXP and 1.00025 LAB now when it is withdrawn.
The remaining portion of the trade fee paid goes to a pool called EggBar. The EggBar contract collects the fees from all the pools, and when the reward distribution command is called, it then sells all the fees turning them into Egg (via EggSwap) That new Egg is divided up among the users in the xEgg pool. When those users withdraw their xEgg it will be worth more Egg than when they put in from the distribution.