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Provide Liquidity

A liquidity deposit supplies both assets of a pool in exchange for a position representing your share of it. From that moment your capital works the market: earning fees when the pool trades, and rebalancing automatically as prices move.

Before depositing​

Review:

  • both token contract addresses;
  • pool type and fee setting;
  • current pool ratio;
  • expected price impact of your deposit;
  • whether a gauge exists;
  • whether you intend to earn fees unstaked or emissions while staked;
  • the cost of later withdrawal and reward claims.

The staked-versus-unstaked decision matters more than it first appears. Fees, Staking and Gauges explains the trade-off.

Basic-pool deposit flow​

  1. Select a pair and pool.
  2. Enter the desired amount of one token.
  3. Review the quoted amount of the second token.
  4. Approve each token if required.
  5. Add liquidity.
  6. Confirm the LP-token balance or position in your dashboard.
  7. If eligible and desired, stake the LP tokens in the pool's gauge.

For an existing pool, the reserve ratio determines the amounts accepted. Depositing at a materially different ratio may cause a refund, a revert or unintended swap-like exposure, depending on the interface and contracts.

Withdrawals​

Withdrawing burns or reduces the LP position and returns the underlying tokens at the pool's current ratio. That ratio may be very different from the one at deposit.

If the position is staked, unstake it before withdrawing, unless the interface supports a combined operation.

Impermanent loss​

LP performance should always be compared with simply holding the same starting assets. As relative prices move, the pool automatically rebalances the position toward the weaker asset. Fees and rewards may or may not compensate for this change; the difference, when they do not, is impermanent loss.

note

Impermanent loss becomes permanent the moment you withdraw. Judge a position by its full history of fees and rewards against the hold-only alternative, not by the token amounts alone.