How to provide liquidity on Equalizer
This article serves as a starting point in your DeFi journey, so we have made this thorough guide that covers all the steps you need to take to start farming EQUAL (on Fantom) or SCALE (on BASE) using Equalizer.Exchange DEX.
There are several steps required to provide liquidity on Equalizer. We’ve outlined them below in sequential order.
- Get funds onto Fantom or Base
- Pick a Pool to farm
- Wrapping Tokens
- Add and Stake Liquidity on Equalizer
- Risks
1. Getting funds on Fantom or Base
If you don’t have any funds available on Fantom (or BASE), you have two options:
a) bridge some assets from other chains
For Fantom: you can use one of the bridges embedded on our website here: https://equalizer.exchange/bridge (Squid/Axelar is probably the first you should try due to its speed and low cost).
Keep in mind, you need to have some FTM in your wallet to pay for gas fees on Fantom network.
For BASE: our users mostly use Squid/Axelar, Jumper.exchange or Across.to, although there could be other options available.
Note: you need to have some ETH in your wallet to pay for gas fees on Base chain.
b) send tokens from a CEX (Centralized Exchange) to your wallet
For Fantom, you can withdraw FTM from the following CEXes:
- Coinbase
- Binance
- Kraken
- OKX
- Kucoin
You can withdraw ETH directly on the BASE network from the following CEXes:
- Coinbase
- Binance
All done? OK, great! Now that you have funded your wallet with natively issued FTM or ETH, you can now decide which pool to farm on the Equalizer Exchange.
2. Picking a Liquidity Pool to farm
There are multiple Liquidity Pools, referred to as LPs, available on Equalizer, for both Fantom and BASE.
Note there are 2 categories of pools:
- Volatile: these are designed for assets that have high price volatility
- Stable: these are designed for assets with little to no volatility, mostly stablecoins
It’s important for you to do your own research on the projects and tokens involved and decide your own risk tolerance.
The Liquidity page on the Equalizer Exchange website contains all the information you need. Here you can sort by APR (Annual Percentage Rate) and TVL (Total Value Locked), search individual tokens, filter stable/volatile pools, make deposits as well as manage your already staked LPs.
The example that we will walk you through in this article is the axlUSDC/WFTM LP on Fantom. As you can see from the screenshot it has the highest TVL and is a volatile pool.
- Select Fantom from the drop down
- Go to the Liquidity Page from the Equalizer Exchange home page
- Click on Deposit on the axlUSDC/WFTM pool
3. Wrapping Tokens
To provide liquidity to an LP you need to provide both tokens that make up the LP. In this example of axlUSDC/WFTM LP, you will need to provide both axlUSDC tokens and WFTM (wrapped FTM).
Wrapping is required to convert native gas tokens like FTM or ETH into a standard format (ERC-20) that is compatible with a wider range of decentralized applications, thereby expanding their usability in the DeFi ecosystem.
Wrapping and unwrapping can be done using the SWAP page https://equalizer.exchange/swap on Equalizer. Here you can swap FTM for wrapped FTM, as per screenshot below:
4. Depositing & Staking the LP
After clicking the Deposit button, you’ll be greeted with the screen below.
Under the CREATE Tab you input the desired amount either axlUSDC or WFTM.
Notice that you only need to fill the data for one of these tokens, as the other one is automatically calculated for you. In the screenshot example above, you can see that 100 axlUSDC = 289.85 WFTM → $100 worth of WFTM.
When you’re ready to deposit, click on Create liquidity. Wait for your wallet (MetaMask, Rabby, other) to prompt you to confirm multiple transactions (token allowances for our smart contract, then a deposit transaction).
Everything confirmed? Awesome, but you’re not done yet. Now you need to Stake your LP position.
In order to start earning farming rewards, you need to stake the LP. Switch to the Stake tab, next to the Create Tab, and then click on the MAX button and press on Stake liquidity in order to start accruing rewards. You will be prompted to confirm two transactions via wallet. Wait for transactions to be confirmed and congratulations you are now farming rewards by providing liquidity to the axlUSDC or WFTM LP.
You can see the farming rewards accumulate in the Rewards page.
You are free to claim rewards at any time.
NOTE: If you are providing liquidity to any pools on BASE, to save on gas fees, liquidity deposits made on the BASE chain are automatically staked in the same transaction.
5. Risks associated with providing liquidity to an LP
Providing liquidity to LPs is a highly rewarded activity at times, however, it does not come without risk. For example, volatile pools can fluctuate wildly resulting in impermanent loss (IL).
Impermanent loss is a risk associated with providing liquidity to decentralized exchanges (DEXs) or liquidity pools in automated market maker (AMM) systems like Equalizer, Uniswap or SushiSwap.
Important to remember, that impermanent loss is not a loss unless you withdraw your liquidity at a time when the pool is imbalanced
You can educate yourself on the concept of impermanent loss and to simulate potential scenarios you can visit Coingecko’s impermanent loss calculator https://www.coingecko.com/en/impermanent-loss-calculator
Always do your own research for the tokens you buy/LP.
Any questions? Want to find out more? Come join our Discord server!
Buying Equal and/or Scale
You can buy Equal and/or Scale tokens on the Equalizer Exchange. https://equalizer.exchange
Where To Find Us
Equalizer Exchange: https://equalizer.exchange
Twitter: https://twitter.com/Equalizer0x
Discord: https://discord.gg/KHnB28MMFH
YouTube: https://www.youtube.com/@0xequalizer
