Understanding How You Get A Percentage of The Pool as Part of Your Yield on Staked Money

 If you have not entered into a pool then you might be a little cautious as you don't understand how you can get such a high yield on the money that you stake 1st of all most pools want you to submit two tokens These two tokens create 1 LP token. For example if you were going to submit coins to Trader Joe XYZ Stable Coin Pool then you will be asked to submit the two tokens shown. For example it might me Avax (Avalanche) and also DAI. You will go to pool and find this combination (assuming you alread have an equal of amount of these two coins ready to stake If not you need to go to trade and exchange Avax or any other coin held on the AVAX chain to get the two equal amounts of tokens) Now once in the pool section you hit max and enter in the top right of the main part of the page. This will take two clicks and you will be in the pool This is called providing liquidity. But you are not done You will will now need to find the farm under the farm tabs that has these two tokens. You will do the same as before and hit max and enter. You will need to approve and supply or submit. Now you will be in the pool and in the farm.

What does it mean to be in the pool and the farm?

You will be getting a percentage of the fees from the pool and you will get the return promised on the farm. Both of these can change and do as more liquidity providers like yourself enter the pool. The more that enter means more fees so you will do better with that but with more liquidity means a lower percentage so you will see the yields fall as more people get in. 

There is a method to this madness and if you are first starting I wouldn't put much in if you feel comfortable putting any in at all If you are still having a hard time give me an email and we can set up a time to help you Once you understand things roll pretty fast. Defi is the future so don't back up on this keep learning.

Comments

Popular posts from this blog

Yields on Stable Coins Will Beat Your Bank Interest Rates Including CD's by A Lot ( 20 to 50 x)

A Lot Of Ways To Make Passive Income In Cryptos - Some Sustainable and Some Probably Not