Liquidity mining with DeFi app

Step-by-step on how to liquidity mine with DeFi app

What is liquidity mining?

Liquidity mining is a DeFi (decentralized finance) mechanism in which participants supply cryptocurrencies into liquidity pools, and being rewarded with fees and tokens based on their share of the total pool liquidity. Liquidity pools in DeFiChain consist of liquidity in pairs of coins, used by the DeFiChain DEX (Decentralized Exchange).

Adding liquidity

Step 1: Launch the DeFiChain app

Don't have the app installed yet? Click here for a step-by-step guide on how to do so.

Step 2: Navigate to Liquidity

Click on Liquidity in the sidebar to access the liquidity pools.

Step 3: Learn more

When you first land on Liquidity, you will be presented with videos you can watch to learn more about liquidity mining on DeFiChain and how the DEX works. The video on impermanent loss is also helpful.

Below the videos, you'd find a list of pool pairs. Within each pool pair the total liquidity in it and APR is displayed.

Step 4: Decide which pool pair to supply liquidity to

You can supply liquidity to the ETH-DFI, BTH-DFI and USDT-DFI pool. Whichever pool pair you decide to supply to, you will need the corresponding coins in your wallet. For example, if you wish to supply liquidity to the BTC-DFI pool, you need to have sufficient BTC (wrapped BTC) and DFI in your wallet. The current version of DeFiChain only accepts wrapped tokens (wrapped ETH/BTH/USDT). If you do not currently have any wrapped tokens, check out this guide.

Once you are ready to supply liquidity to any of the pool pairs, click ADD LIQUIDITY. You can also click the + button for any of the pool pairs to specifically add liquidity to that pool pair.

Step 5: Adding liquidity

In this example, we will add liquidity to the BTC-DFI pool pair. Enter the input amounts for both the BTC side and DFI side. You can make use of the MAX buttons to add the maximum amount for each coin, available in your wallet. When you enter an amount on one side of the pair, the app automatically balances the amount of the other side, based on the ratio of current liquidity in the pool.

TIP: If clicking MAX on a side causes an "Insufficient balance" warning, simply click MAX on the other side of the pair.

Next, select the address you want to receive shares and rewards at. Unless you want to receive rewards at a specific address, you can usually leave this field unchanged.

When you are ready to add, click CONTINUE.

Verify the deposits, rates and pool share, then click SUPPLY to confirm.

The app will then prepare the transaction, followed by adding your liquidity to the blockchain. Do not navigate away from this screen or close the app while the transaction is being prepared.

Once the transaction has gone through. You will see the transaction hash. You can click VIEW ON CHAIN to view the transaction on the DeFiChain Explorer, or click BACK TO POOL to see your added liquidity in the app.

Step 6: Check your liquidity

You will now see your added liquidity above the Available pool pairs table.

Removing liquidity

Step 1: Removing

Click on the - button in the pool pair that you have supplied liquidity to.

Step 2: How much to remove

Enter the amount of liquidity you wish to remove, either by typing the percentage value or using the slider. Next, select the address you want the removed liquidity to go back to. Unless you want to remove to a specific address, you can usually leave this field unchanged.

Then click CONTINUE.

Step 3: Confirmation

Verify the amount of liquidity to remove and receive address, then press CONFIRM.

Wait for the removal transaction to be prepared and processed.