Liquidity Provider Guide with DexWallet and UniSwap
Find in this post:
- Requirements to participate in uniswap as liquidity provider
- Step by step guide on how to add liquidity and earn fees
- Monitoring our assets
Requirements
- We need to have DexWallet Installed
- We need Tokens, we used this guide to get some
- We need to Export our DexWallet to Metamask, find it here
We unlock Metamask with the Password (see requirement #3)
- We go to https://uniswap.exchange/
- Then Pool
We need the same value of ETH and MKR. We exchanged some DAI for ETH as we need the same value amount for both (765$ each). we can exchange following the Kyberswap guide
- We deposit 4.56 ETH (~$167.76/ETH x 4.56ETH)= $765 in Ether
- We deposit 1.005 MKR ($761.19/MKR x 1.005)= 765$ in MKR
- We click Add Liquidity
- 1 min later our transaction for adding liquidity is confirmed and we can see our Pool Share in the market:
Monitoring
We go to our DexWallet, Defi Tab:
Uniswap Liquidity Pool has been added!
Pool Token: When we added liquidity we exchanged that for a synthetic token that represents both: MKR and ETH. Our ETH and MKR are locked in a smart contract. We claim rights to that smart contract with our Liquidity Pool token, for instance when we aim to withdraw our funds. This is just how uniswap works, we won’t pay much attention to this token.
Pool Share: It displays our current funds locked in the smart contract. We deposited 4.56 ETH and 1.005 MKR and the current amounts are 4.63 and 0.99 respectively. Our tokens have been used and we generated fees.
Value: Shows the value of our tokens in US Dollars.
FAQS
How much to expect in earnings?
Unknown. We are a liquidity provider to the market. For every trade in the pair MKR/ETH we’ll generate 0.25% in ETH or 0.25% in MKR in proportion to our Pool Share (current 0.04%).
What happens if ETH and MKR go down in value?
The value of our wallet will decrease as well. Our current exposure is:
- 1530$(~30%) in variable assets (ETH and MKR)
- 3500 DAI(~70%) in stable currency pegged to the US Dollar
Support
Need help? come join us https://discord.gg/rrCCHnG
