How to add liquidity on Quickswap V3? (to get SPACE LP tokens)
What is QuickSwap?
QuickSwap is a decentralized exchange (DEX) based on the Polygon network. It uses an automated market maker (AMM) model, which allows users to trade cryptocurrencies with each other without the need for a centralized exchange. QuickSwap uses liquidity pools to facilitate trading, and users can contribute to these pools in order to earn trading fees.
Unlike traditional order book-based exchanges, QuickSwap uses an AMM to determine the price of assets. This means that the price is determined by the ratio of tokens in a liquidity pool, rather than by the supply and demand of buyers and sellers. As a result, QuickSwap can offer faster and more efficient trading, with lower fees relative to centralized exchanges.
Users can trade on QuickSwap by selecting the token they want to buy or sell, and then choosing the pool they want to trade on. They can then enter the amount they want to trade, and QuickSwap will automatically determine the price based on the ratio of tokens in the pool.
Overall, QuickSwap offers a decentralized and efficient trading experience for users on the Polygon network. With its use of liquidity pools and automated market making, it provides a fast and low-cost alternative to centralized exchanges.
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?
Quickswap V3 liquidity pools allows users to trade cryptocurrencies or other assets on the Quickswap network with greater efficiency and lower fees than V2 pools.
In this step-by-step guide, you will learn how to add Space Tokens to a liquidity pool on Quickswap V3.
Firstly, you will need to have Space Tokens (SPACE) and Polygon (MATIC) on your Web3 Wallet compatible with Polygon (As Web3 Wallets, you can use Metamask, Trust Wallet, or Frame…)
1- Once you have these tokens, you need to go to this page and connect your wallet who contains your SPACE and MATIC.
2- Select “Full range” as range settings
By selecting the “Full range” option, liquidity providers can ensure that their liquidity will be utilized even in volatile market conditions, reducing the risk of impermanent loss. This setting allows the liquidity provider to specify a wider price range for the pool, which can result in a safer and more stable position.
Warning: Only the Liquidity provided with “Full Range” option will be included in your SPACE LP balance, if you want to enjoy of Space LP Bonuses on Final Autoclaim
3- Enter the amount you want to add to the liquidity pool. You need to provide SPACE and MATIC in a 50/50 ratio (for example, $20 in SPACE and $20 in MATIC).
4- Approve 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 “Preview” button, that will show you the position that you will get:
b- Click on “Confirm” 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 at the bottom of the page. In the image below you can see that our position contains 1025 SPACE and 31.02 MATIC, with a total liquidity value of ~$37.17.
Congratulations! You’ve successfully added SPACE and MATIC tokens to Quickswap’s V3 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.
