In my earlier post , I have highlighted the various features of the Tribaldex and it was mainly focused on the community building and tokenization opportunity that Tribaldex provide. But today I will discuss the liquidity position and specifically my Liquidity position that I have in Tribaldex and those liquidity position return me some handsome amount of the tokens.
If you are not aware that what Liquidity pools are then A liquidity pool on Tribaldex is a decentralized finance (DeFi) feature where users supply two different tokens in equal dollar value to a pool that lets other people swap (trade) between them easily. For example, you might add SWAP.HIVE + DEC or SWAP.HIVE + SPS into a pool.
User who has provided liquidity earn by fees generated by other users swapping of tokens as well as incentives provided by the pool owner for providing liquidity.
To provide liquidity, log in to Tribaldex with your Hive account (via Hive Keychain). Then Click "Swap" on top ribbon , and you will observe other option in other ribbon beneath it. Click "Pools" on it. It will show you list of Pools existing in Tribaldex and you can explore pools based on preference and specially pools that shows "LP rewards".
Once you have selected and thought that for which pool you will provide liquidity then you can select "Add Liquidity" and Choose a token pair you want to provide (e.g., SWAP.HIVE:ATX).
Enter the amount of one token, system will automatically match equal dollar values of both tokens. (subject to availability of the balance of that token in your wallet.)
Confirm the transaction by again clicking "Add Liquidity" .Once done, you own a share of that pool
Please find the reference screenshot above in which I have highlighted the relevant links. Below are the some of the pools that I am providing liquidity but if you want to provide liquidity in them then you have to beware of the below risks.
a.) Impermanent Loss: If the price of one token changes a lot compared to the other, your share of the pool can lose value compared to just holding them separately — this is called impermanent loss, which is a real risk in the pools.
b.) Low Volume: If pool has low volume of transaction then you will not generate anything substantial from fees.
c.) Untrusted token Pair : Since it is decentralized finance and if you have participated on token pair like "Untrusted: Swap.hive" , you run in risk of full getting robbed of your swap.hive and left behing bags of "Untrusted" token.
I am currently providing liquidity in ATX:SWAP.HIVE pool and the multiple pools of the "CENT" token paired with LEO,POB,and BEE etc,
As I highlighted the risk, so I will not directly suggest you to go for to provide liquidity but take decision based on your research.
