Explaining Liquidity Pools
This guide will explain how to add tokens to a Liquidity Pool.
Before starting:
You will need to make an account.
Next, add funds to your account.
Key Terms: Liquidity Pool (LP) Tokens represent your share of the pool’s total liquidity. Holding these tokens entitles you to a share of the trading fees generated by the pool. Obtaining it involves depositing liquidity (tokens A and B) into the pool. When you withdraw from the pool, you receive tokens A and B based on the quantity of LP tokens you return and the current token ratio in the pool.
Overview:
Click the "Pools" tab to see the list of available pairs.
For this example, we will use the FIR/PAP trading pair. On this page you will see the total value of the pool and of the two assets found in the pool. To add liquidity, click the "Add Liquidity" button on the right.
A pop-up window will appear that will allow you to choose with the slider how much of your asset to add. You will also see the network fee below. Click "Add liquidity" to proceed.
A new window will appear, prompting you to sign the transaction. Please note, that this will look differently for everyone based on what extension they are using.
After the transaction is completed you will be able to see to the right your pool balance. If you wish to withdraw your assets you will be able to do so through the "Withdraw" button.
Congratulations! You have now successfully added liquidity to Common!
To learn more about the Common web app, be sure to check our other guides on:
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