How do I provide liquidity (get LP tokens)?
You can provide liquidity in single tokens or arbitrary combinations of tokens into Blueshift portfolios to become a liquidity provider (LP).
When you add tokens to a portfolio you acquire a share of the whole portfolio, not just the tokens you provided.
There are different portfolios you can choose from. Each portfolio has its own weighted set of assets. When you add liquidity to a portfolio you get LP tokens in return that reflect your portfolio share.
LP tokens holders earn fee paid by traders for each swap. Also you can stake LP tokens in the farm for additional rewards.
To provide liquidity:
- Expand portfolio you want to deposit in by clicking on “Manage” button
- Click on "Add liquidity" button
- Enter total liquidity amount you want to provide in USD or BASE currency
- Select tokens you want to deposit
- Arrange tokens order by drag & drop: the higher the token in the list, the more you want to deposit it
Smart algorithm will distribute the total amount through selected tokens within your balances trying to minimize losses.
- What causes loss: depositing the amount in some of selected tokens (which share will become greater than the target) causes its price decrease resulting in a loss (same as price impact in swaps).
- How to decrease losses: follow tips inside info-block above "Add liquidity" button and tips under token's names in the 2️⃣ section on the right.
- If you see 0 amount in selected token: it's better for you to provide in other selected tokens to minimize your losses. If you want to provide exactly in this token try to unselect other ones.
- If you change order and nothing happens: in some cases distribution with the lowest losses doesn't depend on the order but it always depends on your balances and token's shares in the portfolio.
Switch off "Provide within balances" mode if you want to see which tokens and what amount you should have on your balance for depositing in selected tokens without losses. You will have no losses if you follow all the "add" prompts.
- Once you are ready, click "Add liquidity";
- Double-check info in pop-up window and click "Add liquidity" again;
- Confirm transaction in your wallet
Also for each token you spent the first time in the Blueshift app you have to confirm granting Blueshift smart-contract access to the token. If needed your wallet will ask for confirmation automatically.