3. Add Liquidity

Liquidity Provisioning with Reax

Step 1: Choose a Pool

Reax offers various liquidity pools where you can contribute your assets. Each pool represents a combination of tokens. Assess the pools available and select the one that aligns with your investment strategy and risk tolerance.

Step 2: Determine Your Deposit

Decide the amount of liquidity you wish to contribute to the chosen pool. You can either deposit a single token or contribute all tokens in the pool to avoid potential slippage. While depositing single token make sure to check slippage/bonus, as it will execute a swap to deposit both tokens.

Step 3: Approve and Deposit Tokens

Before adding liquidity, you need to approve the tokens you plan to contribute. Click on the "Approve" button next to each token, granting permission for Reax to access and manage your tokens. Once approved, proceed to the deposit step.

Enter the desired amount of tokens you want to contribute, ensuring it does not exceed your available balance. Double-check the details and confirm the deposit transaction.

Step 4: Stake Your Assets for Extra veREAX Yield

Reax offers additional rewards through veREAX, which boosts your earnings when you stake your liquidity provider (LP) tokens. Consider staking your LP tokens to maximize your yield and participate in governance activities.

Step 5: Monitor and Manage Your Liquidity

Regularly monitor your liquidity positions and stay informed about the performance of your pool. Keep an eye on your share of the pool and the potential rewards you are earning. Adjust your positions as necessary to optimize your liquidity provision strategy.

Step 6: Withdraw Your Liquidity

If you decide to withdraw your liquidity from the pool, navigate to the liquidity management interface. Select the pool and enter the amount of liquidity you wish to withdraw. Confirm the transaction, and your assets will be returned to your wallet.

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Risks

There are some risks associated with adding liquidity to a stable AMM pool. These risks include:

  • Impermanent loss: If the price of one of the assets in the pool changes relative to the other asset, you may lose money on the difference between the price when you added liquidity and the price when you redeem your assets.

  • Slippage: If you add liquidity to a pool with a lot of liquidity, you may not experience much slippage. However, if you add liquidity to a pool with low liquidity, you may experience more slippage.

Here are some additional tips for adding liquidity to our stable AMM pool:

  • Choose a pool with high liquidity. This will help to reduce slippage.

  • Use a small amount of your assets to start with. This will help to minimize your risk of impermanent loss.

  • Monitor the price of the assets in the pool. If the price of one of the assets changes significantly, you may want to redeem your assets.

  • Stake your LP tokens. This will allow you to earn additional rewards.

  • APR is calculated based on trailing 7-day swap fees collected

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