Add liquidity in pools

DeFi concept

Liquidity pools play a crucial role in the DeFi (decentralized finance) environment by allowing users to provide funds to facilitate token exchanges (swaps).

The advantages of liquidity pools are multiple, such as:

  • the possibility of earning interest, mainly linked to exchanges made (excluding exceptional rewards)

  • the reduction the risks of market manipulation.

BE CAREFUL: There are also risks associated with liquidity pools, such as Impermanent Losses (IL).

Non-permanent losses occur when you provide tokens to a liquidity pool and the exchange rate moves up or down.

When the gap between the token exchange rate at deposit and the current exchange rate is large, you face non-permanent losses. Which means you will get tokens in different proportions than when depositing.

You should know that these losses can be offset by transaction fees which are redistributed to liquidity providers.

Add liquidity

On the “Pools” page you will find the liquidity pools. This page is scalable as other pools will be added over time.

As a liquidity provider, simply choose your pool and click on "Deposit".

With the exception of stable coin pools, our pools are set to 50% - 50%. By entering the number of tokens of an asset, the system will automatically set the second amount of the token to correspond to half of the total contribution.

In the example below, wanting to provide liquidity in the wETH - wBTC pool, the user decided to contribute 0.01 $wBTC and the system automatically filled in the value 0.17049... $wETH to arrive at a 50% - 50% ratio. If the user has enough tokens in their wallet, they will be able to validate this contribution. In this example, the user does not have enough $wETH to finish providing liquidity.

BE CAREFUL: Once the liquidity has been provided, the Smart Contract will send you "proof of deposit" in the form of a compound token (LP token). This token should of course be kept carefully since it is essential to withdraw your tokens from the pool.

Pool details

By unfolding a liquidity pool line, the user will be able to obtain essential information:

  • the volume processed on this pool over 24 hours

  • the volume comparison over the last 15 days via the graph

  • the 24-hour and 7-day APR of the pool ("APR" stands for "Annual Percentage Rate")

  • the total weight of the pool the position of the user, if he has provided liquidity

Remove liquidity

To withdraw liquidity from a pool, you will need to go to the pool in question and click on the "Withdraw" button.

In the withdrawal screen, you will need to:

  • select the amount to withdraw (25%, 50%, 75% and 100% buttons are available to facilitate the user's choice)

  • choose the withdrawal method: a mixture of the 2 tokens (50 - 50) or in only one of the 2 tokens

BE CAREFUL: withdrawing in a single token may cause a loss in value. It is advisable to withdraw with a mixture of the 2 tokens.

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