Beginners Guide on How to Provide and Remove Liquidity on Demeter | Sperax
Hello Nutshells,
If you’ve been keeping up with my updates, you might remember when I introduced Sperax a few weeks back.
Well, now I’m excited to take a deeper dive and guide you through the process of providing and removing liquidity on Demeter.
Trust me, it’s incredibly straightforward and user-friendly!
Understanding Yield Farming
Before diving into the specifics of how to provide and remove liquidity on Demeter, let’s briefly review the concept of yield farming.
Yield farming involves providing liquidity to DeFi protocols in exchange for earning rewards, typically in the form of interest, fees, or governance tokens.
In essence, yield farmers become stakeholders in these platforms, contributing to their liquidity pools.
Demeter, is a user-friendly liquidity manager that can be connected to any exchange, thus the user experience with Demeter is literally DEX-agnostic. To provide/remove liquidity and get rewards users do practically the same operations on Demeter — no matter to what DEX they provide liquidity (UniV3 or CamelotV2, more DEXs will be connected soon).
Each pool represents a specific cryptocurrency pair, such as SPA-USDs or USDC-USDs. Users can choose which pools to participate in based on their investment strategies and risk tolerance.
So, without further ado, let’s start!
Table of Contents
- Pre-requisites
- Providing Liquidity
1. Choosing Farms
2. Fund Wallet with Tokens
3. Add tokens to the Wallet
4. Add Position on Demeter
5. Stake Position - Providing Liquidity Using Zap
1. Choosing Zap
2. Stake Position - Remove Liquidity
1. Unstake on My Staked Position
2. Remove on My Unstaked Position - Final Thoughts
👉Pre-requisites
- Wallet on the browser preferably Metamask or Rabby
- At least one wallet was created or imported
👉Providing Liquidity
1️⃣ Choosing Farms
This is one of the very crucial things to do. You need to consider key factors like the APY and TVL for starters.
But for this example, I will be using SPA-USDs on UniswapV3.
As it has a high APY and, I am buying myself some extra SPA for rewards. 😉
2️⃣Fund Wallet with Tokens
If you don’t have the tokens yet in your wallet, don’t fret because we can buy them easily with just some clicks.
No brainer! I got you!
👉First, On the SPA/USDs UNISWAP V3, click SWAP.
👉Then you will be re-directed to Uniswap V3, and it will show you unknown things. Don’t be scared as it’s normal, just connect your wallet.
👉After connecting the wallet, you will see the SPA and USDs tokens. Magic!! Told you!
👉Next, acquire the quantity of SPA and USDs tokens you intend to use for liquidity provision.
👉Then click swap and approve every transaction on your wallet
3️⃣Add tokens to the Wallet
In order to view the tokens on our wallet, we need to add the token address and information about the token itself.
But with just a single click on demeter, we can do it.
👉Head back to https://demeter.sperax.io/farm, Your farm.
👉At the bottom of the screen, click that plus button next to the token that you wish to have displayed in your Metamask wallet.
👉Click Add token.
👉You can now see the tokens on your metamask wallet.
4️⃣Add Position on Demeter
👉Click Add position on SPA/USDs UNISWAP V3 my farm's tab.
👉Enter the Amount you want to provide liquidity.
👉Click Add Liquidity and, Confirm it on your wallet.
Take note that you will have to approve 3 transactions on your wallet.
Check the pictures below for information.
👉You will know that your transaction is successful if you see your liquidity provided in the “My Unstaked Position”.
Note: If users create a position (LP token on Uniswap or spNFT on Camelot) — they are eligible for DEX fees. But when they stake their position on Demeter — they get SPA rewards on top.
5️⃣Stake Position
👉Click Stake Position.
👉Select lockup type.
IMPORTANT: Locked positions receive additional rewards but cannot be unstaked for 21 days while Unlocked positions can be unstaked anytime but with no additional rewards.
Some of the farms offer “Locked” and “Unlocked” options.
Locked farms offer higher rewards, in return they foresee some cooldown period. An example is on the screenshot.
👉Click Stake LP tokens and approve on metamask wallet.
👉Refresh the tab and you will now see your position in the “My Staked Position”
You will now receive rewards.
👉Providing Liquidity using Zap
1️⃣Using ZAP
ZAP simplifies user experience — you don’t need to swap manually for two tokens with the exact amount needed to create an LP position.
In order to do this, all you need to do is follow the steps below:
- Go to My Farms
- Click Add Position
- Click Zap powered by Wido button
- It will open another window and you need to connect your wallet.
- Input the amount of tokens you want to provide, approve and then confirm on wallet.
In this example, “From” token is USDs or WETH or USDC.
“To” token in UniV3 LP token, depending on DEX where a user creates their position.
In other words, ZAP takes your “From” token, converts it to the necessary amount of two tokens needed to add liquidity to the farm a user selected, and creates unstaked LP position.
👉You will know that your transaction is successful if you see your liquidity provided in the “My Unstaked Position”.
Then Stake your position.
2️⃣Stake Position
👉Click Stake Position.
👉Select lockup type.
IMPORTANT: Locked positions receive additional rewards but cannot be unstaked for 21 days while Unlocked positions can be unstaked anytime but with no additional rewards.
Some of the farms offer “Locked” and “Unlocked” options.
Locked farms offer higher rewards, in return they foresee some cooldown period. An example is on the screenshot.
👉Click Stake LP tokens and approve on metamask wallet.
👉Refresh the tab and you will now see your position in the “My Staked Position”
You will now receive rewards.
👉Removing Liquidity
1️⃣Unstake on My Staked Position
👉Click the Unstake button at “My Staked Position”
👉Next, Click confirm and approve it on your wallet.
2️⃣Remove on My Unstaked Position
👉You will see the position in the “My Unstaked Position”.
👉Click Remove. Then, choose the percentage of the tokens that you want to remove and click Remove Liquidity.
👉Confirm the transaction on your wallet.
And done.
Your liquidity is removed and assets will be back in your wallet.
FINAL THOUGHTS
Diversifying your investments across multiple farms and strategies can help spread risk.
Avoid putting all your assets into a single pool, as this can expose you to higher risk levels. Consider your risk tolerance and investment goals when diversifying.
In conclusion, yield farming in Demeter offers exciting opportunities for crypto enthusiasts to grow their assets. However, it’s essential to approach this space with caution and conduct thorough research before choosing farms. By considering factors like APY, liquidity pool stability, token pairs, risk mitigation, and security, you can make informed decisions and maximize your yield farming success in Demeter’s dynamic ecosystem. Remember that while the potential for high returns exists, so do risks, so always invest responsibly and within your means.
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- Check the Sperax site and read the Docs
#SperaxCreator
I hope you enjoyed reading this one.
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