How do I add Liquidity?

Adding Liquidity on Goblins: Step-by-Step Guide

Goblins allows you to concentrate your liquidity position within a custom price range, optimizing your potential returns. Here’s how to add liquidity in the Goblins ecosystem:

Steps

1. Open the Goblins Web App:
   • Navigate to the Goblins web app.
   • Select “Pools” to open the Pools page.
2. Create a New Position:
   • Select “New position.”
3. Select Tokens:
   • Token Drop-Down: Click the token drop-down menu.
   • Choose First Token: Select the first token you want to add liquidity for. Note: You can choose any pair of SEP-20 tokens. Consider factors such as Total Value Locked (TVL), trading volume, and token price when making your selection.
   • Choose Second Token: Repeat the process for the second token.
4. Select Fee Tier:
   • Fee Tiers: Each token pair offers three fee tiers: 0.05%, 0.3%, and 1%.
   • Existing Pools: If a liquidity pool exists at the chosen fee tier, your position will be added to it. If not, your position will create a new pool at the selected fee tier.
5. Set Price Range:
   • Custom Range: Enter a specific price range to concentrate your liquidity.
   • Full Range Option: Alternatively, you can provide liquidity for the full price range.
   • Price Movements: If the price moves out of your set range, your liquidity will be concentrated into one of the two assets and will not earn fees. Note: Prices will round to the nearest tick.
6. Enter Amounts:
   • Deposit Tokens: Enter the amount of tokens you want to deposit into the liquidity pool.
   • Max Option: You can also select “Max” to use the maximum amount of tokens available.
7. Approve Tokens:
   • Approve Transaction: Select “Approve,” then confirm in your wallet to allow your tokens to be used. Note: This transaction will incur gas fees.
8. Preview and Add:
   • Preview Position: Select “Preview” to review the details of your liquidity position.
   • Add: If everything looks good, select “Add.”
   • Confirm Transaction: Confirm the transaction in your wallet. This will also incur gas fees.
9. View Transaction:
   • Pending Transactions: To view the pending transaction, select “View on SmartScout.”
   • Close: Otherwise, select “Close.”
10. Confirmation:
    • Notification: A confirmation notification will appear once the transaction is complete.
    • Manage Position: After completion, you can view and manage your liquidity position from the Pool page.

Additional Tips and Considerations

1. Evaluate Market Conditions:
   • Token Selection: Choose tokens with high TVL, trading volume, and stable prices to optimize your returns.
   • Price Range: Setting an appropriate price range can help maximize fee earnings while minimizing the risk of impermanent loss.
2. Monitor Your Position:
   • Regular Checks: Regularly check your liquidity position to ensure it remains within the desired price range and continues to earn fees.
   • Adjust as Needed: Be prepared to adjust your price range or reallocate your liquidity based on market conditions.
3. Understand Fees:
   • Gas Fees: Be aware of the gas fees associated with approving and adding liquidity.
   • Fee Earnings: Consider the potential earnings from different fee tiers to choose the best option for your liquidity position.
4. Use Analytics Tools:
   • SmartScout: Utilize tools like SmartScout to monitor transaction status and track performance.
   • Community Insights: Engage with the Goblins community to gain insights and strategies for effective liquidity provision.

Conclusion

Adding liquidity on the Goblins platform is a strategic way to earn fees and contribute to the decentralized finance ecosystem. By following these steps and considering market conditions, fee structures, and strategic placement of your liquidity, you can optimize your returns and manage risks effectively. Stay informed and proactive in managing your liquidity positions for the best outcomes.