âī¸How to add liquidity
Last updated
Last updated
When you contribute assets to a liquidity pool, you receive Liquidity Provider (LP) tokens in return, which represent your share of the pooled assets. For instance, if you deposit both $KIB and $TON, you'll obtain KIB-TON LP tokens. These LP tokens allow you to withdraw your funds at any time.
Every trade between $KIB and $TON incurs a 0.15% fee, with 0.1% going back to the LP pool and 0.05% used to buy back KIB. Initially, if there were 100 LP tokens representing 100 TON and 100 KIB, each token would be valued at 1 TON and 1 KIB. However, if one user exchanges 10 TON for 10 KIB and another swaps 10 KIB for 10 TON, the pool would then hold 100.022 TON and 100.022 KIB. Consequently, each LP token would now be worth 1.0022 TON and 1.0022 KIB upon withdrawal.
Liquidity providers, who contribute assets to liquidity pools, do so because they recognize the value in providing liquidity. Token creators often contribute to these pools to facilitate trading of their tokens on the decentralized exchange (DEX). Liquidity providers earn income by receiving a percentage, typically 0.2% on Kibble, of each transaction within the pool, thereby incentivizing liquidity provision, which is vital for the DEX's operation.
Step 1: Navigate to the 'Liquidity' tab on the app and connect your wallet.
Step 2: Select the tokens you wish to add to the liquidity pool. You must add liquidity to the pool in the form of two tokens at a 1:1 ratio according to USD value. Enter the amount of the first coin you wish to add, the second coin will adjust to match a 1:1 ratio.
Step 3: Then click 'Supply'. You will then need to approve the transaction in your wallet.
You should see a confirmation for the transaction. You should now be able to view your LP tokens in your wallet balance.
You have now successfully added to Kibble's liquidity pool. If you wish to reclaim your tokens, simply click 'Remove Liquidity' and confirm the transactions.
Step 1: Navigate to the 'Liquidity' tab on the app and connect your wallet.
Step 2: Choose your preferred pair, if this pair has not existed yet, you receive the notification at the bottom of the Add Liquidity pool windows
Step 3: Click on legal to accept the announcement that we're given and choose "Initialize pool".
Note:
For liquidity provision, you need an equal value of both tokens, not just equal quantities. In our case, you should have TINU and REDO in your wallet.
Min TINU & REDO is the amount of token you need to add in the pool as the requirement to create pool.
Step 4: After clicking "Confirm" button, you can see the amount of 2 token in the trading pair need to be add in to create the pool.
Step 5: The confirmation will be requested on your connected wallet, in this case it's sent to TONkeeper.
Approve the confirmation, you can now successfully create a new Liquidity pool, you can now add liquidity in the pool you created.
That's it, you're now a liquidity provider on Kibble!
Once your process has been completed in both of 2 cases, users receive the LP token as a badge certifying that you added in the Liquidity Pool. LP token allow users to earn passive incom by farming it.
Read more about Kibble Farming
