Tutorial: How To Add Liquidity to Balancer’s PAR/WETH Pool
What makes The Parallel Protocol so great? The many use cases it has. For example, you can use your PAR tokens to add liquidity to a Balancer pool and obtain BPT. This BPT allows you to gain additional earnings and even mine Mimo tokens. In this tutorial, we will guide you through adding liquidity to the Balancer PAR/WETH 50–50 pool.
(DISCLAIMER: Adding liquidity to the Balancer pool may expose you to impermanent loss. If the market price of tokens changes significantly after you add liquidity, the proportion of tokens in the pool will also change because of arbitrage. If at this point you decide to remove the liquidity, the market value of your liquidity may be lower than it was in the initial state. This loss is called an “impermanent loss”. Please check out this video for more information on this subject)
Step 1: Open your browser and visit the Balancer 50–50 WETH/PAR pool dashboard by clicking on the following link: PAR/WETH 50–50 pool . Once you’re there, please connect your wallet by clicking the ‘Connect Wallet’ button located at the top right corner of the page.
Step 2: Please select an Ethereum wallet to connect. For this tutorial, we will be using Metamask.
Step 3: After successfully connecting your wallet, please click on the ‘Add liquidity’ button, located at the top right corner of the page, below the Ethereum wallet address you connected.
Step 4: A new window will pop up showing both ‘Multi asset’ and ‘Single asset’ options. If you prefer to add both WETH and PAR, please select the ‘Multi asset’ option. In case you prefer to add only WETH or PAR, please select the ‘Single asset’ option.
Step 4: In this tutorial, we will only be adding 100 PAR as liquidity, so we will be selecting the ‘Single asset’ option, PAR token as an Asset, and a Deposit amount of 100 PAR. For adding this PAR liquidity, we will be receiving 0.0089 BPT.
Please click on the ‘I agree’ button, in order to accept the balancer pool’s terms and conditions.
Step 5: If this is the first time you’re adding liquidity to this pool, the platform will ask you to set up a proxy contract. This action should be done only once and it helps save gas fees in the long run. Please select ‘Setup proxy’ to execute the action.
Step 6: Great! You have now successfully created the Proxy contract.
Step 7: In order to add liquidity to the pool, you must grant Balancer permission to transfer each token from your wallet. This must be done once. Please select ‘Unlock PAR’ to execute the action.
Step 8: Cool! You have now unlocked PAR for adding liquidity.
Step 9: It’s finally time to add PAR as liquidity! Please select the ‘Add liquidity’ button at the bottom of the pop-up window. Adding liquidity will incur a 0.02% of slippage.
Step 10: Congratulations! You have successfully added PAR as liquidity to the pool and obtained 0.0089 BPT.
How To Remove Liquidity from Balancer’s PAR/WETH Pool
Step 1: Please select ‘Remove liquidity’ on the upper right corner of the dashboard.
Step 2: Please select whether you would like to redeem your BPT as a Multi asset or Single asset.
Step 3: For this tutorial, we will be removing the liquidity by redeeming the BPT as a Single asset option. Please select the amount of BPT you would like to redeem. In this case, we are redeeming 0.0089 BPT in order to receive 99.96 PAR tokens.
Please select the ‘Remove Liquidity’ button in order to execute the action.
Step 4: Congratulations! You have successfully removed liquidity from the Balancer pool by redeeming your BPT. You can check your PAR balance in your wallet now.
Pro tip: You can use your BPT to add liquidity for mining the MIMO token. Please check the following tutorial for further instructions:
https://mimodefi.medium.com/mimo-liquidity-minting-mining-is-live-726ded1d63ff
Learn More
FAQ |Website | Twitter | LinkedIn | Facebook | Telegram | Instagram | Discord
