To provide liquidity to a pool on the MinSwap DEX, follow these steps:
- Set up a Cardano-compatible wallet: Ensure you have a Cardano-compatible wallet, such as Nami, Eternl, or Typhon. If you don’t have one, create a wallet and securely store your private keys.
- Fund your wallet: Deposit ADA and any other Cardano native tokens you want to provide as liquidity into your wallet.
- Connect your wallet: Visit the MinSwap website and click on “Connect Wallet” in the upper right corner. Select your wallet from the list of compatible options and follow the prompts to connect it to MinSwap.
- Navigate to the Pool section: On the MinSwap dashboard, click on the “Pool” tab to access the liquidity pool options.
- Choose the liquidity pool: Select the liquidity pool you want to contribute to by clicking on the “Add Liquidity” button corresponding to the desired token pair.
- Input token amounts: Enter the amount of each token you want to provide as liquidity. Keep in mind that you need to contribute an equal value of both tokens based on the current exchange rate.
- Review pool share: The platform will display your percentage share of the pool based on your contribution. Review this information to understand your stake in the pool.
- Approve and supply liquidity: Click the “Approve” button to allow MinSwap to interact with your tokens. After approval, click the “Supply” button to confirm your liquidity provision. A prompt will appear for you to confirm the transaction in your connected wallet.
- Confirm the transaction: Review the transaction details in your wallet and approve it. Once the transaction is confirmed on the Cardano blockchain, you will receive LP (Liquidity Provider) tokens, which represent your share in the pool.
By providing liquidity to a pool on MinSwap, you can earn a portion of the trading fees generated by the platform. However, be aware of the risks associated with providing liquidity, such as impermanent loss, and carefully consider these factors before participating in a pool.