Liquidity Tutorial
- Navigate to the Liquidity page.
- On the user interface, select Token A and Token B - the token pair you wish to deposit in a liquidity pool in exchange for LP tokens.
- If you do not see a token you wish to swap, you can import it by entering the token ID in the search bar, acknowledging the disclaimer, and clicking OK.
- You will be notified if a pool does not yet exist.
- Enter some values in the upper and lower fields. These values determine what amount of each token you want to provide as liquidity.
- If you are creating the pool, you must set the ratio of tokens in the pool, which determines the price of the tokens. Usually, if a token has a market price, it makes sense to set the ratio such that the prices of the tokens approximate market prices. If the prices are set too far from market prices, arbitrageurs will step in and rebalance the pool to match market prices at your expense. Note that the protocol charges a $50 fee to create a pool - this is to prevent spamming.
- If the pool does exist, entering a value in the upper field auto-populates the lower field based on the ratio - the combined value of A tokens must always equal the value of B tokens.
- Next, shift your attention to the bottom of the interface. Adjust the slippage tolerance, and make note of Share of Pool, and LP Tokens.
Share of Pool: your percent ownership of the liquidity pool based on the token amounts you have entered. A higher percent ownership translates into a better return on your principal investment.
LP Tokens: a derivative asset acting as a receipt of the liquidity you have provided. 5/6 of all fees are aggregated and distributed to liquidity providers on a pro-rata basis based on the number of LP tokens they hold.
- Once you are ready to proceed, click Supply. HashPack will first prompt you to associate the LP token, after which point you can approve the transaction. The gas fee will be displayed in-wallet.
- Navigate to the My Pools interface on the Liquidity Page.
- Here you will see a list of pairs that you are providing liquidity to.
- If you do not see a pool you joined, you can import it by clicking the upper link and selecting a combination of verified and / or unverified tokens in the pop-up window.
- If 100% of your LP tokens are staked in a Crop Circle, those LP tokens will not appear in the My Pools tab on the Liquidity page until any number of them have been unstaked.
- Click on a pool to expand the interface. Displayed, from top to bottom, are:
- Your LP token amount
- Pooled Token A: number of A tokens representing 1/2 the total value of your LP tokens
- Pooled Token B: number of B tokens representing 1/2 the total value of your LP tokens
- USD Value: the U.S. dollar value of your LP tokens
Note that staked LP tokens will not appear under My Pools.
- Clicking Supply will redirect you to the Supply tab on the Liquidity page.
- Clicking Withdraw will expand the interface further.
- Enter the number of LP tokens you would like to withdraw. The amount of Token A and Token B, displayed in green text, will appear below Pooled Token A and Pooled Token B, respectively.
- Once ready, click Withdraw and approve the transaction in HashPack.
Last modified 7mo ago