Liquidity Pools & Yield Farming with Quickswap on Polygon (formerly Matic Network)
Putting the “fund” in “fundamentals”
Welcome back, dear readers. Last week I showed you how to bridge on to Ethereum’s Layer Two (L2), Matic. Well, this week I’m going to show you one of the projects building on Polygon’s scalability solving second layer.
Quickswap is Matic’s answer to Uniswap. With drastically lower fees, you can add liquidity to pools, farm $QUICK, and trade without breaking the bank as you would on Uniswap. If you’ve traded $UNI before, think of $QUICK as very much the same. It is the DEX’s governance token.
But unlike $UNI, which has a max supply of ONE BILLION TOKENS, $QUICK has a much smaller amount, with only a million total supply. A lot of this supply can be farmed right now by participating in Liquidity Pools & Farming.
If you’re new to the concept of Liquidity Pools (LPs), and Farming — they can be a very good way to earn passive income.
The idea is this: users put a pair of coins into a pool, in equal amounts. For example, 5 $USDT and 5 $USDC. Whenever someone trades those two coins, you get a small % of their trading fee. So the longer you leave the coins in the pool, the more trading fees you build up.
With “farms”, coins ask you to use the “receipt” showing that you are in the pool, and they give you bonuses in exchange. So you earn coins in addition to the trading fees you were already earning.
On Quickswap, you are earning $QUICK by supporting various pools. They change the pools & rewards every week or so, but right now it is very easy to earn a lot of $QUICK just for leaving your money in the pool.
Let’s do a step-by-step showing you how this works.
Step one: Have funds on the Matic network! I showed you how to do this in last week’s article.
Step two: Check out the QUICK section of QuickSwap exchange to see what bonuses are currently running. See below:
The pair shown at the top is USDC-maUSDC. The pool rate is the bonus amount offered; currently 150 $QUICK tokens per day, for the whole pool. So, for example, if you were providing 1% of the pool’s liquidity, you would be earning 1.5 $QUICK tokens every single day.
Step three: Once you find a pair with bonuses you like, and few enough deposits, you should convert half of the funds you’d like to provide into each of the two coins in the pair. In this case, half USDC, and half maUSDC. You would do this on the swap page.
Step four: With that done, it is time to provide liquidity to the pool. Click the Pool link at the top-left of Quickswap, and then click the ‘Add Liquidity’ button, as shown below:
Step five: Select the tokens that you are adding liquidity for. In our example, these are $USDC and maUSDC. Type in the amount that you are adding, and Quickswap will automatically fill this amount in for the second coin, based on the current exchange rate. See below:
See how you are shown both the exchange rate for the pair, as well as what your Share of Pool would be? Confirm this, and congratulations! You are now providing liquidity to the LP.
Step six: Now head back to the QUICK link where we started, and select ‘deposit’ on the chosen pool. See below:
Step seven: Click “Deposit QUICK-V2 LP Tokens” to deposit your liquidity “receipt” token, as shown below – and that’s it! You’re now farming $QUICK! It will automatically be collected whenever you withdraw your receipt. After that you can withdraw liquidity from the Pool page, if you want. Or earn passive income until the next week’s bonuses start!