How to Launch a Token with Valorize (Part 3)

By Marco Huberts

Valorize is a tool for releasing a (governance) token without writing any code. This is an example of the type of activities that are possible to do with the tokens, and in no way an endorsement of the activity. We encourage all our clients to get appropriate legal guidance based on their jurisdiction.

In Part 2 of “How to Launch a Token with Valorize”, we managed your recently deployed token by minting tokens when the time to next mint has passed, and by creating an airdrop that distributes tokens to a set of addresses. Also, we imported this token into your MetaMask wallet. However, a token is not really “launched” unless people can trade your token on a decentralized exchange (DEX). In Part 3, we will describe, step-by-step, how to make your token tradable on UniSwap, Ethereum’s main DEX, by creating a liquidity pool.

Step 1: Connect to UniSwap App

Go to app.uniswap.org, set your MetaMask wallet to the network you deployed your token on (we use the Ropsten Test Network), and connect it to UniSwap. Then click on “pool” in the top left corner of the page and you will see this overview:

Step 2: Import your Token

In order to create a liquidity pool we need to Click on “+ New Position” and you will see this screen:

Click “Select a token” and the following screen will allow you to paste the contract address that we used to import your token in MetaMask:

Filling in the contract address that we found in the previous part, makes our recently deployed token pop-up:

Click “Import” and you will get a warning from the application that this token does not appear on the active token list. Click “Import” again and you will see your token to the right of ETH:

Step 3: Setting the starting price and its ranges

We want to provide liquidity for the ETH-xVALOR pair so we will keep it like this. If you want to pair your token with another token / stable coin other than ETH, you can click the drop down menu right to ETH and you can search for or paste the contract address of the token of interest.

Press “0.3%” as the fee tier. This will determine the fee that you receive for providing liquidity and by contributing to UniSwap’s Automated Market Maker model.

After clicking that, this part of the screen will pop-up:

Here, you can set the starting price for the liquidity pool. The amount you fill in this field will determine how many tokens you can get with the current price of ETH. In this case we determined that people can buy 1000000 xVALOR for 1 ETH. In other words, 1 xVALOR token is worth 1/1000000 ETH. We set the price range between 900000 xVALOR per ETH and 1100000 xVALOR per ETH. This price range determines at which prices you will be providing liquidity. If the price reaches 900000 xVALOR/ETH then the liquidity pool will be converted to 100% ETH, and when the price of 1100000 xVALOR/ETH is reached, the funds will be converted to 100% xVALOR. This can also be seen as a “limit order” (click here for more information), but in this case our main focus is to create a liquidity pool that allows users to trade our new token.

See below an overview of our price and price ranges:

Step 4: Finalizing the liquidity pool

The liquidity pool will be created with the recently set price and price ranges by depositing adequate amounts of xVALOR and ETH. There are no rules on how much liquidity you need to provide. Generally, the less liquidity is in the liquidity pool, the more volatile the price (and will most likely stop trading when the price changes fast), while the more liquidity is provided the more stable the price. Also, when your token gets more traction, other people can and will provide liquidity as well. In this case will deposit 2 ETH and the amount of xVALOR tokens will be automatically set based on the starting price you set before:

Click “Approve xVALOR” in the bottom right corner, and your MetaMask will ask you to give permission to UniSwap to access your funds. Click “Confirm” and wait for the transaction to be mined. When the transaction is completed, click “Preview” and you will see the following screen summarizing the setup of your liquidity pool:

Note: have around 20–30% more ETH in your wallet than you are providing for this pool as you will have to pay higher gas fees to initialize a liquidity pool than the amount you have to pay to add liquidity to a pool.

Click “Add” and your MetaMask will ask you to confirm the transaction. Confirm the transaction and you will be redirected to the page containing the overview of liquidity pools. Wait for the transaction to be mined and you will see your liquidity pool in the overview screen:

Congratulations, you created your first liquidity pool, and your new token can now be traded on UniSwap!