How to add liquidity on Pancakeswap V2? (to get SPACE LP tokens)
What is Liquidity Mining ?
Liquidity mining, also known as yield farming, is the act of providing liquidity via cryptocurrencies to decentralized exchanges (DEXs). Since the primary goal of an exchange is to be liquid, DEXs seek to reward users willing to bring capital to their platform.
Most DEXs are decentralized by replacing order books with an Automatic Market Maker (AMM). An AMM is a smart contract that regulates trading. Since smart contracts are decentralized, users do not have to trade the order book of an exchange. Instead, they effectively trade with other users.
The AMM collects these fees and grants them to each liquidity provider (LP) as a reward. Therefore, the DEX offers a symbiotic ecosystem where each group of users helps each other. While the token swapper pays a small fee to trade on a decentralized exchange, the liquidity provider earns money for providing the liquidity that the first user will need.
How to add liquidity?
In this step-by-step guide, you will learn how to add Space Tokens to a liquidity pool on pancakeswap.finance.
First, you will need to have Space Tokens (SPACE) and Binance Coin (BNB) on your BNB Smart Chain Wallet.
1- Once you have these tokens, you need to go to this page and connect your Binance Smart Chain wallet who contains your SPACE and BNB.
2- Click on “Add V2 Liquidity” button
3- Enter the amount you want to add to the liquidity pool. You need to provide SPACE and BNB in a 50/50 ratio (for example, $20 in SPACE and $20 in BNB).
4- Enable SPACE, so the token will be able to interact with the pool
Approving SPACE will require to sign a transaction on your Web3 wallet, don’t worry, it is safe.
5- Confirm the transaction, and wait for the network confirmation.
a- Click on “Add” button, that will show you details about the position that you will get:
b- Click on “Confirm Supply” button, that will ask you to sign another and last transaction on your web3 wallet.
Once the tokens are added to the liquidity pool, you’ll be able to see your liquidity by clicking on this page. In the image below you can see that this wallet contains 482.4 SPACE and 0.03593 BNB, with a total liquidity value of ~$16.7.
Congratulations! You’ve successfully added SPACE and BNB tokens to Pancakeswap V2 liquidity pool. Prepare yourself for a rewarding experience of trading and earning. Your contribution fuels the liquidity and enhances the trading experience for everyone involved.
