While I don't play Splinterlands, I want to take advantage of liquidity pools as a way of earning passive income. After encountering the post titled "SPT- Multiple Income Streams from one Token" by @axrho, I decided to pull the trigger and participate in the SWAP.HIVE:DEC liquidity pool. Neither Hive Engine nor LeoDex has them, so I used Tribaldex to find liquidity pools. This post is about using Tribaldex to add liquidity, and it's from my persepctive as a novice trader.
Images: Screen captures come from Tribaldex. Banner made using HTML and CSS. Edits made using MS Paint.
Every now and then at the Daily Crypto Markets Daily Blog at LeoFinance there are discussions about liquidity pools or diesel pools. Given the boost Splinterlands has given to Hive overall, one of the popular liquidity pools discussed is DEC:SPS.
Recently my interest has shifted to accumulating liquid HIVE both to have in my wallet as well as to have SWAP.HIVE to buy pegged versions of external crypto assests such as SWAP.BTC. Given what I had read in "@"axrho's post, I thought the SWAP.HIVE:DEC liquidity pool would be better for me, so I've been shifting assets around to be able to make my initial contribution to the SWAP.HIVE:DEC pool.
Things To Know Ahead of Time
Liquidity pools (also known as diesel pools) on Hive are accessed at Tribaldex. Although it's possible I may have missed it in my investigations, I will say that neither Hive Engine nor LeoDex let you access them.
Liquidity pools are designated in the format
Quote Token. For the DEC:SPS pool I mentioned earlier, DEC is the base token and SPS is the quote token. In my case, DEC is the quote token while SWAP.HIVE is the base token.
The wallet must have both the base token and the quote token before going to visiting the liquidity pools at Tribaldex. How they end up in the wallet is up to the wallet owner.
It's not enough to put either SWAP.HIVE by itself or DEC by itself into the SWAP.HIVE:DEC liquidity pool. For the SWAP.HIVE:DEC liquidity pool, both are needed.
Regardless of how much of either the base token or the quote token is in the wallet, contributions to the liquidity pool need to be made in (more or less) a 50/50 split:
- 50% of the contribution is denominated in the base token;
- the other 50% comes from the quote token (after the base token is used to buy an equivalent amount denominated in the quote token).
|It's like asking "To buy 1 Bitcoin (BTC), how much Ethereum (ETH) is needed?" It's roughly 18 ETH to buy 1 BTC. So if someone wanted to create a BTC:ETH pool on Tribaldex, a contribution could consist of 1 BTC along with 18 ETH.|
That covers the preparation. Next is the transaction.
Navigating Tribaldex To Find Liquidity Pools
1. Visit Tribaldex at https://tribaldex.com/.
2. Locate "POOLS" on the navigation bar at the top of the page, then click the link.
3. At the POOLS page is a <H1> titled "Diesel Pools"; below it is a navigation bar. On this bar, locate "Add Liquidity" and click the link.
4. Still part of the Diesel Pools section of Tribaldex, the web page now shows a form for adding liquidity:
This is where the liquidity gets added.
Adding the Liquidity to the Pool
1. 3 fields need to be filled out before the contrinution to the liquidity pool can be made:
* The Liquidity Pool itself (accessible via dropdown list);
* The Base Token amount (typed in a data entry field);
* The Quote Token amount (typed in a data entry field);
|Clicking the MAX control in the data entry form automatically places however much of the token is in the wallet. In my case, I didn't use it since I entered an amount less than MAX. But it's there if you need it.|
|Although this is a data entry form being filled out, the fields where values had to be typed weren't apparent to me in either dark mode or light mode. After comfirming with @jfang003 that the 50/50 split between tokens was the way to go, I used trial and error to determine where the data entry fields were located. This is an example of bad UX (user experience) hurting an application. Bad UX can contribute to someone not adding liquidity to a pool because it was a hassle; not everone using Hive is a trader, so it can be frustrating when a form doesn't work as someone thinks it should. Bad UX can have a negative impact on HIVE as well as the tokens at Layer 2.|
2. Once the 3 fields are filled, click the long button at the bottom of the form.
My Contribution to the SWAP.HIVE:DEC Liquidity Pool
With over 5 SWAP.HIVE in my wallet, I ended up buying around 185 DEC for around 2.464 HIVE. I contributed 2.464 SWAP.HIVE along with 183.880 DEC.
The numbers here are a bit off, but at the time of my contribution I made sure the split was as close to 50/50 as possible.
Contributing funds to a liquidity pool is a way of earning passive income. Periodically rewards will be airdropped or dripped into the wallet.
If the contributions are large enough, this is probably all that's needed aside from periodic contributions.
Given my small contribution and the next contributions for the foreseeable future, it's more like semi-passive income since I will need to make frequent contributions just to get them to an amount where passive income generation can be possible.
Just My Two Sats
I chose the SWAP.HIVE:DEC pool because some of the rewards are in BEE tokens used by Hive Engine and Tribaldex. BEE has more or less the same value as HIVE, so earning BEE would be a quick way to increase the value of my wallet.
Between the rewards from the pool and the blog posts involving Layer 2 tokens at Hive Engine and Tribaldex, I should have a steady stream of BEE I can sell to buy SWAP.Hive I can use to buy not just DEC for the SWAP.HIVE:DEC pool but also for other pegged Layer 2 tokens
Whatever other tokens I get where I'm not an active contributor, I will sell them for SWAP.HIVE.
Most incoming LEO will be staked to improve my upvote value; however, once in a while small amounts of LEO will be sold for SWAP.HIVE. PIZZA will be staked in order to distribute rewards using @pizzabot.
100 POB is being unstaked for buying SWAP.HIVE, and future POB rewards will be used to buy SWAP.HIVE. The remaining staked POB will stay staked for a while, but that can chane depending on my needs.
My immediate plan is to boost my liquid HIVE in order to be able to do more things. SWAP.HIVE will allow me to do that. Besides boosting my liquid HIVE, I want to stack SWAP.BTC and SWAP.DOGE in order to take advantage of any changes which make it easier for me to sell in order to buy more SWAP.HIVE. Liquidity pools such as SWAP.HIVE:DEC will give me another way I can boost my liquid HIVE.
Most of my earnings come from blogging, but I'm at a point now where I can move into the passive earnings game and figure out which options suit my needs. Once I figue out which passive income strategies work for me, maybe I can take a time-out and participate in #Play2Earn.
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I also expect Festivus to take off in popularity in the coming years.