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Providing Liquidity on Avalanche

Introduction

Providing liquidity on Avalanche is a great way to earn rewards in ACRE and PGL from fees.

To provide liquidity for the ACRE/AVAX pair, you have to hold both tokens in your wallet and add them to the liquidity pool at Pangolin. In return, we will receive PNG which you can then stake at Arable for ACRE rewards.

Liquidity mining is the process of providing liquidity for a pair of tokens at a DEX (decentralized exchange). In return, you receive LP (liquidity pool) tokens. Providing liquidity for a token pair allows other users to swap between those tokens. The holder of the LP tokens will receive a fraction of the fees (and often other incentives) that the DEX charges anytime someone performs such a swap.

Arable allows you to bond (lock) ACRE/WAVAX LP tokens with Arable and in return, you will earn rewards in ACRE for the time you have bonded your LP tokens. The rewards are calculated based on the amount of ACRE/WAVAX LP tokens that are currently bonded with Arable.

Before you decide to participate in liquidity mining you should be aware of the possibility of impermanent loss. You can find a good explanation of (im-)permanent in this Medium article (external site).

Requirements

You need to have a MetaMask wallet with AVAX and ACRE tokens in it. If you don't have the MetaMask wallet, please install the MetaMask browser extension and add support for the Avalanche network and import the ACRE token to MetaMask.

Follow this guide to purchase ACRE on Pangolin.

Provide Liquidity at Pangolin

  1. Go to the pools page at Pangolin and click on the Create a pair button to add liquidity.

  1. Here you choose the token combination to add to the tool. Leave AVAX selected in the top input field and click on the ˅ button to select the ACRE token in the bottom input field.

  1. Search for the ACRE token in the search field:

    Type 'acre' in the search field
    Select the ACRE token from the search results

  1. Click on Add Liquidity. This will take you to the Add Liquidity modal.

  1. Enter the desired amount of AVAX you want to provide to the pool. An amount of ACRE in equal value to the amount AVAX you specified will be entered automatically.

    Enter the amount of AVAX
    An equivalent value of ACRE will be calculated
    Click Approve ACRE to allow the contract to access the ACRE tokens in your wallet.

  1. Confirm the MetaMask popup.

  2. Click Supply to add the specified amount of tokens to the pool.

  3. Confirm providing liquidity to the pool.

  4. Confirm the MetaMask popup.

  5. You have now received PGL tokens for the ACRE/AVAX pair in your wallet. Optional: to view them in MetaMask you can add the following contract to MetaMask: 0x64694FC8dFCA286bF1A15b0903FAC98217dC3AD7

Now you can go back to the Arable app and bond your LP tokens for additional ACRE rewards. Keep in mind that you have to wait for the next epoch to arrive to start claiming ACRE rewards. You can check the current epoch in the Arable app.