Providing AMM Liquidity

Step 1:

Choose the pair you would like add liquidity to.

Step 2:

There are a couple of parameters to set before adding liquidity to the AMM pool.

Collateral Amount and Leverage

Set your position size by inputting the collateral you are going to commit and selecting the leverage to be applied.

Applying leverage to your liquidity position can achieve greater capital efficiency and enable you to earn more fees. However, bear in mind that the impermanent loss can also be amplified when your position is more leveraged.

Price Range

Here you will choose the price range in which your liquidity will be effective. There are 3 options you can choose from: “Targeted”, “Broad” and “Max”, with “Targeted” being the tightest option and “Max” being the widest option.

A tighter price range makes the liquidity position more capital efficient and earns more fees than a liquidity position with a wider price range. However, there is a greater risk of impermanent loss, and if the price goes goes outside your selected price range, your liquidity position becomes idle and stops earning fees.

Slippage Tolerance

Similar to trading, you can set the slippage tolerance when you add liquidity to the pool. The default slippage tolerance is 0.5%.

Step 3:

Once you have added liquidity to the pool, you can check the stats of your liquidity position, including returns from the liquidity position (including fees and impermanent loss), whether your position is within price range, and the leverage of the liquidity position (which informs about the health of the position, i.e. whether the position is making profit/loss from fees, impermanent loss, funding payment).

Step 4:

You can add additional liquidity to your existing liquidity position. Note that the price range will have to be identical to that of your existing liquidity position. You will have to remove liquidity first if you wish to change the price range of your liquidity position.

Step 5:

You can remove liquidity from the current position by using the slider to select the amount you wish to remove. Removing liquidity is likely to lead to creation of a permanent position. Note that once you have submitted a request to remove liquidity, there will be a 48-hour cooldown period. Once the cooldown period has ended, your permanent position and collateral will be automatically transferred to your trading account and you may manage the position on the trading page.