Add/Remove Liquidity and Farm LP Tokens

This guide will use SpiritSwap as an example, most other exchanges will be very similar.

Add Liquidity to a Pair to obtain LP Tokens

Adding to the Liquidity Pool adds to the overall liquidity of both tokens and even more for the specific trading pair that you choose. This is extremely helpful to the tokens and the ecosystem as a whole.

1. On the main page of your preferred exchange, find the Trading section usually located on the left-hand menu. In the drop-down menu select the Liquidity option.

2. Once on the Liquidity page, you are presented with a menu where you can see any liquidity pools that you have joined. From this menu, you can add or remove from any Liquidity Pool as you wish. Note: On SpiritSwap, you may need to hit the back arrow on their menu since it takes you directly to the Add Liquidity menu.

3. Selecting the Add Liquidity button here will take you to the Add Liquidity menu. You need to then enter the two tokens that you would like to add liquidity to. You need to own an equal value amount for each token in order to add to the Liquidity Pool. The menu will do the calculations for you. Note: Before adding liquidity, it is highly recommended that you research and understand Impermanent Loss. Further explanation on Impermanent Loss here: https://www.youtube.com/watch?v=8XJ1MSTEuU0 There is also an Impermanent Loss calculator for better understanding: https://dailydefi.org/tools/impermanent-loss-calculator/

5. Once you have input your tokens and amounts, you will need hit the Supply button and confirm the transaction in your wallet. This will combine your tokens into what is called Liquidity Pool or LP tokens. You will get a confirmation once the transaction is complete.

Congratulations! You've added liquidity! Now you can stake your LP tokens if your pair has a farm available.

Removing Liquidity From a Pair

1. Access the Liquidity menu of your exchange as shown above. You will see your liquidity pairs in this menu. You may need to expand the menu to see the Remove button.

2. Enter the amount of your LP that you would like to remove. As with any other transaction that interacts directly with your wallet, you may need to approve the interaction. Select the Remove button, confirm the transaction, and lastly confirm the transaction in your wallet. There will be a confirmation once complete. Note: This is where Impermanent Loss kicks in. You may not receive back the same exact amount of tokens that you put into the pool. Research Impermanent Loss to understand why.

That's it! The tokens will now be out of liquidity and back in your wallet.

Farm LP Tokens

"Farming" generally refers to staking LP tokens to receive bonuses outside of the transaction fees that get paid out to LP token holders. 1. Complete the steps in the Adding Liquidity guide above to obtain LP tokens for a farmable pair. You can check which pairs can be farmed in the Farming menu on the exchange.

On this page, you will see all of the different possible pairs. Example below.

2. Once you approve the exchange to interact with your wallet with your LP tokens, you will see the options to add or remove your LP tokens on the farm. Using these buttons is as simple as selecting the plus or minus, entering the amount, confirming on the exchange, and lastly confirming in your wallet.

Congratulations! You now know how to farm. You will earn rewards while your LP tokens are on a farm as indicated by the APR. To collect your rewards, use the Harvest button.