DeFi App Tutorial Uniswap + DeFiZap: Easy Way To Join Liquidity Pool And Earn Trading Fees
logo
DeFi App Tutorial Uniswap + DeFiZap: Easy Way To Join Liquidity Pool And Earn Trading Fees

By tomoyan | tomoyan | 4 Mar 2020


Uniswap is a decentralized token exchange that lets you swap tokens fast and easy.

No signup. No KYC (know-your-customer).

DeFi App Tutorial Uniswap: Easy Way To Trade Ethereum Based Tokens (ERC20 Tokens)

But that is not all. You can also earn exchange fees by contributing liquidity.

For example, if you contribute to ETH <-> DAI trading pair, you will collect fees on any trades made between this pair.

How to add liquidity?

Uniswap has this "Pool" feature that you can add or remove liquidity.

pool

You will need to deposit the same amount of ETH and ERC20 token into a liquidity pool.

But if you use this "Add" feature, the process is kind of tedious here. It takes time and effort AND costs more fees to add liquidity so I use DeFiZap for this process. DeFiZap is a lot easier to use and you can basically add or remove liquidity in one transaction. (saves time and fees)

Once you go to DeFiZap, you just connect your wallet.

https://defizap.com/

desktop

I use Coinbase Wallet and it is not listed on Desktop page, but it is listed on mobile page so I just go ahead and connect wallet on mobile.

mobile wallet

Once you are connected, click "Explore Zaps" to find a pool that you like to contribute to. https://defizap.com/zaps

There are so many pools, pairs, and platforms to choose from and you can try any pairs.

pools

If you like to learn more about each pool, check out "Pools". https://pools.fyi/

poolsfyi

Pools will show you more detail information about a specific pool. You can even check your shares if you connect your wallet.

But I just pick "DAI Unipool" (ETH/DAI pair on Uniswap) here. (the process is the same for any pool, Zip In or Zap Out.)

eth/dai pool

This pool shows you that you are going to contribute to ETH <-> DAI pool on Uniswap.

If you were to use Uniswap's "Pool", this process will take about 7 minutes and need to pay fees 3 times, but DeFiZap, you just need to "Zap In".

"INPUT" how much you like to contribute, and pick your "TRANSACTION SPEED" if you like but "Average" is the default and "Zap In" again.

zapin

Confirm transaction on your wallet and "Pay"

pay

That is it.

What is going on behind the back when you "Zap In" is this 👇

behind

DeFiZap will take your ETH and divide the amount in half and put those tokens in to the pool you picked.

And then you will collect a small trading fee when ETH <-> DAI swap happens.

How to remove liquidity?

If you decide to remove your contribution, you can "Zap Out" at any time.

Go to the pool you zapped in and click on "Withdraw Maximum" will take out all your contribution from the pool, pick your proceeds option and "Zap Out".

zapout

This will take out all your contribution from the pool and get it back to your wallet.

 

Resources:

cover image

 


tomoyan
tomoyan

tomoyan.github.io


tomoyan
tomoyan

Crypto News Technology / Programming How-To guide and Tutorial

Send a $0.01 microtip in crypto to the author, and earn yourself as you read!

20% to author / 80% to me.
We pay the tips from our rewards pool.