Did you know there are now DeFi Liquidity Pools on Hive? Check out our introduction to Tribaldex Diesel Pools below.
Thanks to Tribaldex Diesel Pools, DeFi liquidity pools are now available on the Hive blockchain.
Have you ever wanted to swap some of your Hive layer-2 tokens but a lack of liquidity has hindered your ability to do so?
Well, Diesel Pools help ease these liquidity issues that have plagued trading Hive layer-2 tokens using the current traditional order book model.
This introductory guide takes a look at DeFi liquidity pools themselves and what advantages their presence on the Hive blockchain offers users and investors alike.
What are DeFi liquidity pools?
When it comes to how cryptocurrencies are traded, the game is changing from the traditional order book model that we all know and love, to DeFi liquidity pools.
DeFi liquidity pools are smart contracts that lock tokens on a decentralised exchange, in order to ensure liquidity for those tokens.
This requires users to lock tokens inside the smart contract, therefore making them what’s called liquidity providers.
As we spoke about above, DeFi liquidity pools ease the liquidity issues faced by traders using decentralised exchanges.
Especially on somewhat niche, illiquid pairs.
They’re a unique and best of all automated way to replace the traditional order book model we see across centralised exchanges.
Solving the liquidity challenge in the process.
DeFi comes to Hive
Diesel pools are the Hive blockchain's equivalent of Uniswap liquidity pools. allowing traders to instantly and cost-effectively swap one type of token for another.
Try them yourself.
Most likely you’ll get a better price using the swap tab on Tribaldex than you would even waiting for the perfect fill via the order book on another interface.
Not to mention the fact you’ll be instantly filled at that price.
So why Diesel Pools?
Well, diesel is a play on words around Ethereum’s gas fees.
Because when it comes to Hive’s DeFi liquidity pools you see, you avoid the infamously high gas fees you’d pay on any of the popular Ethereum dexes.
You see, this is the Hive blockchain which means fast and free transactions.
DeFi with no gas fees on Hive?
You’ve gotta be at least a little keen for that.
How to instantly swap Hive layer-2 tokens
Thanks to DeFi liquidity pools on Hive, you’re able to instantly swap any Hive layer-2 token for another.
Before starting, remember you can deposit HIVE into your wallet using the Leo DEX interface to save on fees, before flicking back to Tribaldex where your balance now displays as SWAP.HIVE.
You can then swap any tokens in your wallet via the Diesel Pools interface by following these 3 simple steps.
- Swap tokens by clicking pools > swap,
- Select your from and to tokens, as well as your slippage parameters.
- Hit the swap button.
You will now have swapped one Hive layer-2 token to another.
For example, you could use this feature to seamlessly move between SWAP.HIVE and SIM tokens.
How to provide liquidity to a Diesel Pool
But let’s get to the juicy stuff where you can provide liquidity to a pool in order to start earning some of the LP rewards on offer.
Providing liquidity to a Diesel Pool on Tribaldex is a simple 2 step process.
With its generous LP rewards on offer, we’re going to use the SWAP.HIVE:SIM LP for this example.
- Convert half your SWAP.HIVE into SIM by clicking pools > swap, selecting each token from the dropdowns and hitting the swap button.
- Add liquidity by clicking pools > add liquidity selecting the SWAP.HIVE:SIM pool from the dropdown, adding your tokens and hitting the add liquidity button.
You will now have provided liquidity to the SWAP.HIVE:SIM Diesel Pool on TribalDEX.
Final thoughts on DeFi liquidity pools on Hive
Under the pools tab, pay extra attention to which pair offers LP rewards.
Your liquidity is valuable and you don’t want to be offering it up for free if you don’t have to.
Something else to keep in mind is that when you first provide, or simply add liquidity to a pool, you don’t receive rewards from that 24 hour period.
Don’t add liquidity daily as you will never receive LP rewards.
Ultimately, DeFi liquidity pools on Hive are an exciting addition for traders and liquidity providers alike.
As more Hive layer-2 tokens start offering larger and more diverse LP rewards, Tribaldex Diesel Pools have the potential to take the entire ecosystem to the next level.
Best of probabilities to you.
Direct from the desk of Dane Williams.
Why not leave a comment and share your thoughts on the DeFi liquidity pools on Hive called Diesel Pools, within the comments section below? All comments that add something to the discussion will be upvoted.
This Hive blog is exclusive to leofinance.io.