Provide TFT Liquidity on Pancake Swap
Table of Contents
Introduction
In the case of TFT on Binance Smart Chain (BSC) and PancakeSwap, becoming a liquidity provider involves providing TFT and another token (such as BNB) to the TFT-BNB liquidity pool on PancakeSwap.
By adding liquidity to this pool, the LP helps to ensure that there is a consistent and sufficient supply of TFT(BSC) available for trading on the BSC network. This contributes to the overall liquidity of the TFT token on PancakeSwap, making it easier for users to buy and sell TFT(BSC) without experiencing significant price slippage.
Becoming a liquidity provider for TFT(BSC) on PancakeSwap can have several benefits. Firstly, as an LP, you earn trading fees proportional to the amount of liquidity you have provided. Anyone interested in providing Liquidity to the ThreeFold pools on PancakeSwap will be incentivized and rewarded with trading fees. 0.17% of all trading fees of all transactions go to Liquidity providers. These fees are distributed to LPs based on their share of the total liquidity pool.
Additionally, by participating in the liquidity provision process, you actively contribute to the growth and adoption of the TFT token. As more users trade TFT on PancakeSwap, the liquidity and trading volume increase, which can attract more traders and investors to the token. This increased activity can lead to a broader awareness of TFT and potentially drive its value and market presence.
Prerequisites
Before you can become a TFT(BSC) LP on Pancake Swap, there are a few prerequisites you need to fulfill. Here's what you'll need:
- BSC Wallet: To interact with the Binance Smart Chain and Pancake Swap, you'll need a BSC-compatible wallet. MetaMask is a popular option that supports BSC. Make sure to set up and secure your wallet before proceeding.
- Connect BSC Wallet TO Pancake Swap: Visit the Pancake Swap website and connect your BSC wallet to your Pancake Swap account.
- Get BNB Tokens: As the native cryptocurrency of Binance Smart Chain, BNB is required to pay for transaction fees on the network. Ensure you have some BNB tokens in your BSC wallet to cover these fees when buying TFT(BSC) on Pancake Swap. Read this tutorial to know where you can buy BNB and transfer them to your BSC Wallet.
- Sufficient TFT: To participate as a liquidity provider on PancakeSwap, you will need to acquire TFT(BSC) tokens and deposit them into your BSC Wallet, along with an equivalent value of another token, into the desired liquidity pool. The TFT tokens act as your share of the liquidity pool and entitle you to a portion of the trading fees generated by the platform.
Become a TFT - BSC LP
Anyone who fullfill the prerequisites can create a liquidity pool on Pancake Swap.
Now that you're all set, you can become an LP by going to your PancakeSwap homepage and click on Trade > Liquidity button on the navbar as shown. Please Make sure you're on BNB Smart Chain network.
You will now be directed to the Liquidity page. When providing liquidity for TFT(BSC) on PancakeSwap, we recommend you to pair it with BUSD (Binance USD), which already has significant liquidity. The ratio between TFT(BSC) and BUSD in the existing pool is fixed by market prices. Simply choose the amount of liquidity you want to provide for both currencies. Consider the potential risks associated with impermanent loss. Join the TFT pool on PancakeSwap to contribute and trade TFT(BSC) tokens.
Click “approve” for both currencies, then c;ick 'confirm' to accept the wallet prompts and fees.
Click “supply” and confirm the wallet prompt and fee.
Congratulations! You have now exchanged the selected amounts for both currencies for LPs (Liquidity Tokens) and you are providing liquidity and earning a part of the transaction fees.
Important Notice
It's important to note that being a liquidity provider involves certain risks, such as impermanent loss, which occurs when the value of the tokens in the liquidity pool fluctuates. However, if you believe in the potential of TFT and want to actively contribute to the liquidity ecosystem on PancakeSwap, becoming a liquidity provider can be a rewarding opportunity to earn fees and support the growth of the platform.
Disclaimer
The information provided in this tutorial or any related discussion is not intended as investment advice. The purpose is to provide educational and informational content only. Investing in cryptocurrencies or any other assets carries inherent risks, and it is crucial to conduct your own research and exercise caution before making any investment decisions.
The ThreeFold Token (TFT) is not to be considered as a traditional investment instrument. The value of cryptocurrencies can be volatile, and there are no guarantees of profits or returns. Always be aware of the risks involved and make informed choices based on your own assessment and understanding. We strongly encourage you to read our full disclaimer and seek advice from a qualified financial professional if needed.