Adding Liquidity is a means to expand the size of the liquidity pool. On Uniswap v2, this is generally quite useful, albeit not usually technically necessary. Increasing the value of a liquidity pool reduces slippage % and price impact %, making the protocol "friendlier" to larger holders who wish to enter or exit their positions. Just as too little liquidity is harmful to any cryptocurrency project, as is a liquidity pool with too much liquidity. As a result, AmpliFi incentivizes liquidity providers, whilst maintaining the ability to temper yield in the event more liquidity is added than necessary.
Any #AMPLIFI holder may contribute to the Liqudity Pool by pairing any number of #AMPLIFI tokens against the same value of $USDC, the current liquidity pairing.
Example: Holder A wants to earn yield by adding $3,000 to the liquidity pool. He interacts with the AmpliFi Dapp to pair $1,500 $USDC worth of #AMPLIFI against $1,500 $USDC.
Target Yield: 42% (annualized) + $USDC Market Making Fees
Reminder: Uniswap v2 distributes $USDC fees to Market Makers. AmpliFi has no control over and is not responsible for distributing $USDC liquidity pair trading fees to Liquidity Providers.
Impermenant loss is a risk applicable to contributing to any liquidity pairing on any cryptocurrency project. Impermanent loss occurs when the price of the token you added liquidity to decreases to a lesser value than it was when you added the liquidity. Similar to selling a token for a loss on a down-trend, if you choose to remove LP at that time instead of giving time for the token's price to stabilize, you may lose a portion of your holdings. However, the fees earned on $USDC and #AMPLIFI yield may still result in a net-positive gain, but this is situation dependent. Do not add to any liquidity pool without a full and complete understand of the potential risk of impermanent loss.
To begin liquidity mining, follow these steps:
- 1.Visit perpetualyield.io and click 'Begin' to enter the DApp
- 2.Navigate to the left bar and click 'Staking'
- 3.On the right, you'll see the 'Liquidity Mining Pool' with a target APY of 46%
- 5.Within Uniswap, confirm USDC and AMPLIFI are selected as your pairing tokens - make sure you have enough of both in your wallet to pair the desired amount
- 6.Follow the steps on Uniswap to combine your USDC and AMPLIFI into LP tokens
- 7.Congratulations, your LP tokens are now earning trading fees! Let's get them earning AMPLIFI as well
- 8.Now, back at the 'Liquidity Mining Pool' module, click 'Get Started'
- 9.In the pop-up, select how many LP tokens you'd like to stake
- 10.Approve permissions for the contract to access your UNI-V2 LP tokens, if you haven't done so before (this will be prompted in your wallet once you press approve)
- 11.Once the Approval transaction goes through, you'll see the pop-up button change to "Stake"
- 12.Confirm the amount you'd like to stake and press the button to initiate the staking transaction!
- 13.Congratulations! You're now earning #AMPLIFI on your LP tokens.
In the 'Liquidity Mining Pool' module, you can always view your deposited amount and earned rewards. Remember - you can unstake and claim (or compound) your rewards at any time!
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