HOW TO ADD LIQUIDITY ON DEFICHAIN WALLET

Yet another liquidity pool to try out! DeFiChain is a dedicated blockchain specifically for decentralized finance (DeFi).

Previously, we tried adding liquidity on Uniswap V3 pools. Now, let us dive into how we do liquidity pools on DeFiChain.

STEP-BY-STEP GUIDE ON ADDING LIQUIDITY ON DFI

Buy DFI coins

The first thing you must do is to have DFI tokens in your wallet.

You can purchase DFI on these exchanges:

In my case, I created an account on Bitrue.

Note that there are not that many trading pairs for DFI. As of this writing, you can only buy DFI using USDT, BTC, or ETH. For more updated info on the markets offering DFI, see this link.

I have some USDT on Bitrue, so I’ll use that to buy DFI coins.

Install DeFiChain App

You can easily find the app on Google Playstore or App Store.

Once installed, you can quickly create an account. And it’s just the usual process:

1. Click ‘Create a Wallet’, in case you have no account yet.
2. You’ll be given 24 recovery words for you to safe keep.
3. You’ll be asked around 6 questions to verify the 24 words given in the previous step.
4. Create your 6-digit passcode.

Then you’ve successfully created your DeFiChain wallet. Now, let’s take note of your address by clicking on “RECEIVE” where you’ll be shown a QR code and your wallet address.

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Send DFI to your DeFiChain Wallet

You can send a test amount first if you want.

On Bitrue, every DFI withdrawal transaction costs 1 DFI (deducted from the total amount withdrawn.)

The total withdrawn amount is 2 DFI but since we have 1 DFI for the transaction fee, we will only receive 1 DFI on the DeFiChain Wallet.

To get the rest of my DFI, I did another withdrawal transaction from Bitrue.

Choose your Liquidity Pool

Now that we have our DFI coins on the app, let’s check on the available pools.

At the bottom part of the interface, tap “DEX” and you will see a variety of pools to choose from.

In this example, let’s try the dETH-DFI pool!

Swap some DFI to have the other token for your chosen LP

Since we chose the dETH-DFI pool, we will need some dETH tokens.

To do that, just tap on “SWAP” on your desired pool.

Since we would be needing both tokens, let’s swap 50% of our DFI. (You can choose MAX if you intend to add some more DFI to your wallet.)

Scroll to the bottom and you’ll see “CONTINUE”.

To authorize the swap, you’ll be asked to enter your 6-digit passcode.

Once you “CONFIRM SWAP”, you’ll just wait for a few seconds and you got your dETH and DFI!

Add Liquidity

We now have both tokens for our Liquidity Pair, so let’s now “ADD” liquidity.

You can tap on “50%” on either token and it will just automatically populate the equivalent tokens for the other pair. If it causes insufficient balance on one side, try setting it on the other pair.

Same procedure:

1. Tap “CONTINUE”
2. Then “CONFIRM ADD LIQUIDITY”
3. Transaction authorized.

Now, we have our active pool pair.

Hold Your Position

Your earnings will depend on how long you’ve held onto your position and some other factors (trading fees generated on the pool, perhaps?).

For the sake of this blog, I held the position for 24 hrs.

After 24 hours, we have collected 0.00000020 dETH. It’s not that much but this is just for illustration purposes. 😉

Removing Liquidity Position

To remove our liquidity position, let’s go back to “DEX”.

Click on “Your pool pairs”, then “REMOVE”.

You will then be asked how much of your position you want to remove. In this case, I want 100%.

Then same procedure as every transaction in this app: CONTINUE > REMOVE > CONFIRM REMOVE.

Now we have closed our position.

And that’s it! Success!

Personal Thoughts

Since we have done a guide on Uniswap V3 Liquidity Pools not long ago, we can definitely compare and say DeFiChain is much easier to navigate. The only tricky part is where to buy DFI but the rest is easy. Whereas with Uniswap, although there’s more earning potential there, it depends on the bounds you set so it’s a bit more complex, you have to get some data on the side to know where to put your bounds for optimal results.

Nevertheless, it’s always good to diversify.

How about you? Try both and let me know your thoughts on these liquidity pools in the comments section.

Happy investing! 🚀🚀🚀

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