Providing Liquidity

Providing liquidity on Monadswap allows you to earn a share of the transaction fees generated by the platform. Here's how you can add liquidity to a pool:

Steps to Add Liquidity:

1. Navigate to the Liquidity Section:

   • Go to the "Liquidity" tab on the Monadswap platform.

2. Select a Pool:

   • Choose the token pair for which you want to provide liquidity. Both tokens need to be in your wallet.

3. Enter Amounts:

   • Specify the amount of each token you wish to contribute to the pool. Monadswap will automatically calculate the corresponding amount of the other token based on the pool's current ratio.

4. Review and Approve:

   • Review the details of your liquidity provision, including your share of the pool and potential earnings.

   • Approve the transaction in your wallet and confirm to add liquidity.

5. Monitor Your Liquidity:

   • After adding liquidity, you can monitor your pool share and earnings in the "My Liquidity" section. You can withdraw your liquidity at any time.

Understanding Impermanent Loss:

• What is Impermanent Loss? Impermanent loss occurs when the value of your deposited tokens changes relative to when you deposited them. The larger the price change, the more you are exposed to impermanent loss.

• Minimizing Impermanent Loss: Monadswap’s AI optimizes liquidity management to reduce the impact of impermanent loss. It's important to monitor market conditions and adjust your liquidity positions accordingly.