Welcome! This article will discuss what staking liquidity is, as well as provide a tutorial on how to stake liquidity yourself.
EDIT: Please be warned; staking liquidity is a great way to earn gains, but this is still a type of investment. As with every form of investing, there is always the risk of loss. Use this article as a tool and do your own research. We are not financial advisors.
What Does Staking Liquidity Mean?
To begin, lets define the term liquidity. Basically, liquidity refers to the availability of liquid assets in a market. Liquid assets would be assets that can be easily turned into cash when needed ( a.k.a. liquidizing). Having liquidity is significant in the crypto market as it allows for the fast and efficient processing of transactions. In a literal example, say you want to cash out your profit on LEAF. In order for this to be successful, the exchange (Pancake Swap) would need BNB to provide in exchange for your selling of the LEAF – not unlike how a bank requires physical cash on hand if one were to need a withdrawal. The term for this reserve of funds is called a liquidity pool (LP)
When you stake, you are adding “staking” a proportionate amount of BNB and LEAF into the liquidity pool. What this means is that you are providing liquidity to the pool that LEAF has to facilitate its transactions. Obviously this is beneficial to LEAF, but what’s in it for the person staking??
You know how there’s that whole 5% of every transaction that goes into the LP? That gets distributed amongst the people who stake in the LP. This distribution is based on the amount of liquidity that has been staked.
Higher contribution to the LP = higher returns from the transactions.
What Do I Get From Staking LEAF?
As mentioned above, you will receive a proportional amount of the 5% LP tax for each transaction involving LEAF
*You earn LEAF and BNB*.
Additionally, your position will be reflected in CAKE-LP tokens which can be used for various things on Pancake Swap – like more staking through their site, or getting an avatar. This Binance article will explain the staking process through Pancake Swap in greater detail.
How Do I Add Liquidity To The LP?
Despite being a complex concept to grasp, adding liquidity is very simple – even to stoners – and a great way to help Legal Leaf grow while also earning extra profit.
First, head to Pancake Swap through the link directly, or navigate to the Trade page on their site and choose Liquidity.
While on the liquidity page, select Add. You will see a menu where you can enter your BNB and LEAF as a pair to add liquidity with.
After you enter your tokens, you will be shown the share of the pool you will hold.
When you successfully supply liquidity to the pool, you will be able to review your liquidity position on the same page in Pancake Swap in the ‘Your Liquidity’ tab!
Now, that's what I call "High Stakes".
And that’s pretty much it - you can remove your liquidity whenever you feel like through Pancake Swap, and when you do you will collect the rewards you earned while your liquidity was staked. It is very much the same idea of receiving interest payments for your savings account balance, your money stays put – and you get paid! Although this pays way better than your bank will!
If you have any questions, please ask us in our Telegram group, we have a collection of wealth there ready to help!