What Is Liquidity Farming?
Liquidity farming is the process of lending cryptocurrencies to a variety of decentralized application (or Dapp) smart contracts for a set period of time, in order to receive rewards in the form of additional cryptocurrency.
In other words, you provide the liquidity — add the assets you currently have to the existing supply. By doing so, you become a liquidity provider. You add to the ecosystem and are rewarded for that.
What are liquidity provider tokens (LP)?
LP tokens are mathematical proof that you provided assets to a pool, you can think of them as a coupon or a receipt. Naturally, you receive them only after you provide liquidity.
Still don’t know how does it work? Check out the video made by
How to farm $NUM?
- The first step would be to visit the farm page: https://farm.unicrypt.network/farms?token=0x3496B523e5C00a4b4150D6721320CdDb234c3079.
In order to allow for the $NUM tokens to be farmed, we are currently using the Unicrypt service. Click Accept.
2. The link will direct to the Farm NUM page.
3. Connect your wallet: you can choose between Coinbase and Metamask.
4. In order to stake your LP tokens in the farm, and receive $NUM as a reward, you will first need to add liquidity to the NUM/USDC pool on Uniswap.
Click on Get liquidity tokens. This will redirect you to the Uniswap pool.
6. Add liquidity to the pool by clicking on Add liquidity in the top right corner.
7. Pick the amount of tokens you’d like to add to the pool. Approve the tokens, and confirm the transaction in your wallet — in our case it’s Metamask.
8. Press Confirm supply and confirm the transaction in Metamask.
10. Stake the UNI LP tokens you received before. Click Approve, confirm on Metamask. Then click on Stake.
- Users can leave the farming program anytime, but remember to withdraw LP tokens and harvest rewards before leaving.
Note: If you cannot see the $NUM tokens in your Metamask wallet, here’s what you need to do.
- Follow this link: https://coinmarketcap.com/currencies/numbers-protocol/
- Click on the Metamask icon here:
All done! Simple, isn’t it? Now that you have your tokens staked, they will passively earn you $NUM tokens.
⚠️ Important: LP Farming/Staking involves risks such as Impermanent Loss — make sure to be aware of those risks before staking. You can measure/calculate potential Impermanent Loss here: IL Calculator.