With Yield Farming taking the DeFi community by storm, token holders are rushing to take advantage of the latest opportunities to 10x their investments.
Balancer is essentially a digital exchange powered by an automated market maker (AMM) and smart pools. Where most exchanges facilitate peer-to-peer trades between individuals, AMMs allow people to trade tokens against smart contracts in addition to people.
Their smart pools allow anyone to set up public or private liquidity pools and set their own trading fees. In addition to having exposure to the tokens in their portfolio, investors can stake their tokens to earn trading fees through Balancer’s liquidity pools.
Curious about how to supply liquidity to Balancer? This step-by-step guide walks you through the process in 4 easy steps.
Step 1 - Connect Your Wallet
To get started, navigate to https://pools.balancer.exchange/.
Click the “Connect Wallet” button in the top right corner of the screen to connect your digital wallet.
In this example, we’ll connect using MetaMask. Click the “Connect” button on both pages to allow your wallet to access Balancer.
Step 2 - Pick a BZRX Pool
To supply BZRX to a Shared Pool, we need to find a pool that’s set up to accept BZRX.
Click the encircled + next to Filter token(s), type in “BZRX”, and click the icon for the BZRX token when it appears.
Select a Shared Pool to supply liquidity to. For the purposes of this guide, we’re simply going to pick a Shared Pool with a low Swap Fee.
Step 3 - Setup Proxy
Click the “Add Liquidity” button. Before supplying liquidity for the first time, Balancer will ask you to set up a proxy contract.
Click “Setup” to create a proxy contract. This is a one-time operation and will cost more than the a simple transaction due to the amount of work involved in setting up the contract.
Accept the transaction and wait for 10 block confirmations.
Step 4 - Add Liquidity
Click the “Add Liquidity” button again to supply liquidity to the Shared Pool.
Click the slider next to BZRX and confirm the transaction to allow Balancer to spend your BZRX tokens.
Once the transaction has been confirmed, you can add liquidity to the Shared Pool.
Click the “Single Asset” tab and type in the number of tokens you want to deposit or click “Max” to deposit all of your BZRX tokens. When you’re ready, click “Add Liquidity.”
Once the transaction has been confirmed, refresh the page to see your share of the pool where it says “My Pool Share” and the value of those shares below ‘My Asset Value.”
Start Earning Trading Fees Today
With unique features like simulated trading, smart order routing, and censorship-resistant front-ends hosted on IPFS, Balancer is working hard to push the boundaries of DeFi and enable new opportunities for cryptocurrency traders.