PROVIDE LIQUIDITY (LP TOKENS)

Throughout the universe, nothing is more coveted than liquidity pool tokens, they are the backbone of every swap.

PROCESS

The process of creating LP tokens is quite simple, but there are some gotcha's so let's discuss in detail all about providing liquidity. LP tokens are comprised of two different tokens. For this example, let's use BNB/BUSD. When the tokens are paired in LP tokens, you almost always use equal dollar values of both tokens. $100 of BNB and $100 of BUSD.

LP TOKEN - IMPERMANENT LOSS

One important point about creating LP tokens and needs to be understood.

When you create LP tokens, they have a dollar value at the time of creation like $200 in the example above. In our example, if the value of BNB rises by a significant amount, you still have $100 of BNB in your LP tokens. That means the number of tokens in the LP position adjusts to meet that price. This is called impermanent loss. Learn More

How to Create LP Tokens

To create LP tokens (usually for a specific farm) follow this process:

  1. Verify that the correct amount of tokens are in your wallet

  2. Go to HyperSwap and connect your wallet

  3. Click LIQUIDITY at the top of the swap interface to bring up the LP token list

  4. Click ADD LIQUIDITY or check your list of LP tokens below (they don't show here when staked)

  5. Add the amounts of the tokens you would like to use to create LP tokens and review the details

  6. If any tokens need approval, click APPROVE for those tokens

  7. Once approved, click SUPPLY

Congratulations, you now have LP tokens in your wallet. These tokens are earning fees from the swap they were created on. In this case, HyperSwap pays LP holders a full 0.3% of the fees from transactions. One of the best rates of return on Binance Smart Chain.

In addition to receiving fees, you can stake LP tokens in farms to earn more benefits. HyperSwap LPs can be used in The Asteroid Field.