Liquidity Pools
Last updated
Last updated
Liquidity in decentralized exchanges (DEXs) refers to the ease with which an asset can be bought or sold without significantly impacting its price. Liquidity pools are mechanisms on DEXs that provide this liquidity. These pools consist of funds (typically pairs of tokens) locked by users, enabling seamless trading between tokens. Users who provide liquidity (known as liquidity providers) earn a share of trading fees generated from trades within the pool.
GoMining offers an opportunity to add liquidity to existing liquidity pools directly from the GoMining website. In the GoMining ecosystem, liquidity pools are powered by PancakeSwap.
Please refer to Pancakeswap General FAQ for more information on how liquidity pools work.
To create liquidity on the GoMining platform, you'll need:
A compatible wallet (like MetaMask or Trust Wallet) connected to the BSC network
GOMINING tokens
USDT (Tether) tokens
A small amount of BNB to cover transaction fees
Providing liquidity requires familiarity with crypto wallets, connecting your crypto wallet to the website, and confirming or approving blockchain transactions. Check our instructions to learn more about crypto wallets.
Before creating liquidity, consider these factors:
High Entry Barrier: The terminology and process of creating and managing liquidity pools can be complex for new users
Impermanent Loss: There's a risk of impermanent loss, meaning the value of your tokens when withdrawn might be less than if you had simply held them. This risk increases with higher price volatility
Volatility: High token volatility might require a wider price range for your liquidity to remain active
Trading Volume: High trading volume generally enables a narrower price range, potentially increasing efficiency and earnings
Market Trends: Overall market conditions (bullish, bearish, or stable) can heavily influence token prices and your earnings
Risk Tolerance: Your risk tolerance should guide your choices (wider price range for lower risk, narrower for higher potential returns)
Duration: How long you plan to provide liquidity affects your strategy (short-term vs. long-term)
Go to the "Liquidity" section within the GoMining platform
Choose the GOMINING/USDT pair (additional pairs may be added in the future)
Click "Deposit"
Enter values of both GOMINING and USDT
Set your preferred fee tier — the percentage of trading fees you earn; 1% is recommended
Set your price range — a percentage range around the current price; a narrower range limits risk but also your active time in the pool
Approve the transaction in your wallet. Your tokens will be moved to the liquidity pool
You earn in two ways:
Trading Fees: You receive a share of trading fees proportional to your share of the liquidity pool based on your chosen fee tier
GoMining Rewards (from veTokenomics): You earn additional GoMining rewards based on a leaderboard system. The leaderboard factors in the amount of fees earned and how long you've kept your liquidity in the pool. There is also a bonus system based on voting. A portion of weekly GOMINING emissions (10%) is distributed among liquidity providers via this voting system.
Click the "Claim" button on the Liquidity page to withdraw your accumulated trading fees and GoMining rewards.
Use the "Add" button on the Liquidity page to increase your existing liquidity position. You will need to maintain the required ratio of GOMINING and USDT.
Use the "Remove" button on the Liquidity page. Be aware:
Coefficient: When you remove liquidity, even partially, your leaderboard coefficient drops to 1. This affects your rewards calculation in the veTokenomics system. Full removal sets your coefficient to 1 immediately, while partial removal results in a recalculation where the longer your liquidity remained in the pool, the higher your reward.
