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Liquidity Provision
Becoming a liquidity provider (i.e. participating in market making) is one of the best ways to earn money on DODO. This is accomplished by depositing assets you own into a liquidity pool, in exchange for a percentage of that pool's trading fees. You can choose a pool to contribute to based on the assets you hold, or based on its previous performance.
Connect your browser wallet. DODO supports most of the popular browser wallets, including MetaMask, Trust, TokenPocket, imToken, SafePal, and Coinbase Wallet.
Click on the “Add liquidity” button to start providing liquidity.
There are two ways to find the pool you wish to add liquidity to:
Select the "By tokens" option to search liquidity pools by tokens. Then, type in the name of one of the tokens in the trading pair which you're interested in depositing your assets into.
There could be multiple liquidity pools for the same trading pair. Pick the pool that fits your needs based on its TVL and APY.
- If the name of a liquidity pool is displayed as, for example, “BUSD USDT”, this means that the pool supports both single and double-sided liquidity provision. This means that liquidity providers can provide any mounts of either token, or even just provide only one of the tokens in the pool.
- If the name of a liquidity pool is displayed instead as “BUSD + USDT”, this means that the pool supports double-sided liquidity provision only, in which liquidity providers are required to deposit equal amounts of BUSD and USDT into the pool.
Select the "By address" option to search liquidity pools by addresses. Then, type in the address of the liquidity pool which you're interested in depositing your assets into.
Once you have selected a pool, click on the “+” button to the right to add tokens to that pool.
Before depositing your funds, you can set your slippage tolerance by clicking on the gear button at the bottom right of the “Add Liquidity” dialog.
When the difference between the market price and the quoted price from DODO’s liquidity sources for tokens which you would like to deposit exceeds your slippage tolerance, the trade will fail.
The default slippage tolerance is 3%. You are free to customize this percentage or choose the Auto mode by clicking “AUTO”. The Auto mode automatically adjusts the slippage tolerance based on the liquidity of different trading pairs:
- Slippage tolerance is set at 0.5% for mainstream trading pairs like BTC-USDT, WBTC-USDT, ETH-USDC, WETH-USDC, BNB-USDT, and WBCB-USDT.
- Slippage tolerance is set at 0.1% for stablecoin trading pairs, including USDT, USDC, DAI, and BUSD.
- Slippage tolerance is set at 3% for every other trading pair.
Before confirming your fund deposit, make sure to double-check whether the pool supports single-sided or only double-sided provision.
After clicking “Add”, confirm the transaction in your wallet to complete the deposit.
- Note: When depositing a token in a DODO liquidity pool for the first time, you need to give DODO permission to access that token in your wallet by clicking “Approve” in your wallet app.
After successfully adding liquidity on DODO, you can view your liquidity positions by going to “Liquidity” -> “Your Liquidity”.
You are free to withdraw your liquidity whenever you want. This can be accomplished by clicking on the "Remove" button in a pool on the "Your Liquidity" page.
You can select how much of your assets you would like to withdraw as a percentage of the total amount deposited.
Liquidity provision is not risk-free, and there is always a possibility of loss. Please be careful when adding liquidity and make sure you understand the risks.