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How to Provide Liquidity on ALEX
January 18, 2022

Participate as a Liquidity Provider on the ALEX Bitcoin DeFi platform to earn a portion of the liquidity pool fees.

Participating in the Liquidity Pools

Anyone can participate as an ALEX Liquidity Provider. First, click on the “Pool” tab of the menu bar to view the available liquidity pools to select from:

All available pools will be displayed including information such as:

Trading Pairs: Available liquidity pool token pairs to which you can add liquidity.

Liquidity: The amount of total liquidity in USD value.

Volume: The trading volume between the liquidity pair tokens, displaying both 24-hour and 7-day volume.

Fees: The amount of all fees generated from the liquidity pool token pair via swaps.

Select the token pair to which you want to add liquidity and select
“+ Liquidity.”

After selecting “+ Liquidity” you’ll be taken to a control panel for that specific liquidity pool, allowing you to “Add Liquidity” or “Remove Liquidity” to that token pair.

Selecting the “Setting” icon will open the Transaction Setting panel. Here you can specify:

  • Slippage Tolerance: Slippage tolerance is the maximum % of price movement you accept between where you agree to enter a transaction and its execution. The default slippage tolerance is set to 4% but you can select a custom percentage. If price movement exceeds the slippage tolerance, the transaction will be cancelled.

How to add Liquidity?

In the example above we are looking to add liquidity to the STX/xBTC pool,which is at the time requesting a 50–50 portion of STX and xBTC in USD value.

At the time of publication, if you want to add approximately $4,000 worth of liquidity in the STX/xBTC pool, that will require 1,000 STX and .051 xBTC tokens.

Select “Add” and you will be taken to a confirmation screen:

Check that the transaction details are correct, then select “Confirm” which will bring up the smart contract confirmation window where you would select “Confirm”

After successfully adding liquidity, you will be able to see your LP tokens in the ‘My Liquidity’ panel.

The ‘Pooled’ amount represents the total token holdings of the Liquidity Pool.

The pooled amount changes depending on the price action of both assets, which may result in changing values. The “My Pool Share” reflects your contribution, as a percentage, to the pool’s liquidity for reference.

By adding liquidity, you can earn the liquidity pool fees simply by holding the liquidity pool tokens.

Please note that it may take up to 20–40 minutes for your token balance to be updated in your wallet. ALEX is built through Stacks smart contracts which settle on Bitcoin. This transaction time reflects the Bitcoin block speed as well as processing on the Stacks network.

Thank you for your participation as an $ALEX Liquidity Provider.


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