Tutorial: 350% APY Liquidity Mining — yes it works, but not without a risk
Easy reading:
Part ONE: Basics at the beginning
Part TWO: Step by Step Tutorial how to get 350% APY or more
PART ONE: basics
skip everything and get directly to the platform:
https://biswap.org?ref=6c033aaf91a1772d7d97
(yes a ref link, please be so kind and use it to reward the efforts)
Golden crypto rule before everything:
ALWAYS do your own research
NEVER invest money you are not willing to lose
What is Liquidity Mining / Liquidity Farming?
Basically you deploy your hard gained crypto assets as liquidity to exchanges, lending protocols and liquidity pools (where we will focus on in this tutorial). You lend your assets for liquidity making the decentralized system more secure and faster. And you get a reward for it — up to 350% APY and sometimes more.
But wait — why do we get so much money and how is it calculated?
The Exchange takes fees for swapping coins & tokens (usualy something around 0.3%). This income is rewarded to the community who serves the liquidity, based on the partial part of the overall liquidity of a trading pair. Yes just for the coin/token pair you serve liquidity and this is how you can control risk and earnings.
The earnings are normally measured in:
APY (annual percentage yield)
APR (annual percentage rate)
Sounds similiar, doesn’t it? APR is the annual rate charged by earnings, APY takes compounding into account, APR doesnt. This is why APY is higher than APR. And often the positive share price development is also taken in account. So read carefully how the rates are calculated before you snap the bait of a high rate.
Risks? Are there any?
Of course — it’s the crypto market. The regular risks of crypto by its high volatility and uncertain future also take a roll here. Especially if your selected token pair cointains coins with extreme risk by its value. Like always — DYOR before you spend 1$
Especially for Liquidity Mining / Farming you get some extra risks you should keep in mind:
- scamming website — everything is gone before you can save your money
- rug pull — the team behind your chosen service sells all its tokens and the price will drop badly
- Getting out of Liquidity Farming means you have to trade at least your LP tokens (I will explain a bit later) back to coins/tokens and maybe you want to swap to a specific coin and withdraw it to your wallet, which costs fees.
- Impermanent Loss (bit tricky to explain) you will suffer loss if your tokens change their value not equal — there are many extreme good guides out there already like this one: Understanding Impermanent loss
This sounds risky and complex — is it worth it?
Great question — like mentioned before, there are risks. The progress itself is super easy, once you understand it. In my personal opinion its worth it and I put a share of 20% of my cryptos in such farms.
PART TWO: Step by step tutorial
The basics to get into it: you need a wallet, they support a lot. you need crypto, there are tons of tutorials out there how to get some, you need BNB(Binance Coin) to get easy into it.
Register here:
https://biswap.org?ref=6c033aaf91a1772d7d97
(yes a ref link, please be so kind and use it to reward the efforts)
As you can see, biswap already maintains some money — at the day of writing this medium its close to 800m in BNB and 45bn of trading volume.
Step 1: Connect your wallet:
Step 2: Click on “Farms” in the menu
Step 3: Click on details at the desired coin pair:
Step 4: swap 50% of your BNB to each of the tokens you want to start with (screenshot example 50% BFG and 50% BSW)IMPORTANT: keep in mind you still need some BNB for the swap fees!
Step 5: Click on Liquidity and add both Tokens (special tipp click on max on the token which is a bit less worth than the other one, makes life easy) And approve tokens (in my example BFG) yes it takes again BNB fees! (a minor bug, you have to approve twice, for each coin once — but the name of the token on the button will maybe stay the same, dont get confused by it)
Step 6 press Supply and Confirm Supply (yes it takes for every step little fees) — ITS NOT FINISHED!
Step 7 Click again on Farms, Details on the desired farm and Enable Farm
Step 8 Click on Stake LP -> “Max” and Confirm to enable your tokens to get some money for you
Congratulations! You are now farming BSW Tokens like this:
Bonus Tipps for loyal readers until the end:
- Take safe pairs like one coin as a stable coin like TETHER reduces your volatility risk
- Check all fees for getting into a service and out of the service BEFORE you invest
- ALWAYS make research, at least on google for the coins and tokens and the service you want to use.
Hope the guilde helped you! Wish you all the best and maximum earnings
