From last week’s episode of Joining the PRVArmy we gave you a vocabulary-enhancement session to help you better understand how we roll here in PrivacySwap. From “hodling” to “staking”, whether you are a “guppy” or a “whale”, we hope you are now ready to resume learning more stuff about PRV!
Today, we will be talking about one of the most important core features of your beloved defi project: yield farming.
Let’s put on our nerd glasses for a while
To help you better understand the concept, you have to recall that PrivacySwap is a yield farming ecosystem running on the Binance Smart Chain (BSC). If you are a neophyte (or just can’t get your head wrap around the principle) you might need to first distinguish liquidity providing from staking.
Staking is placing your coins in a specific place to secure the network (Proof-of-stake). Usually earning transaction fees.
Liquidity providing is exactly that, lending your money to a liquidity pool in return for a cut of the transaction fee profits.
So in a way, liquidity providing is a form of staking! Not only that, liquidity providing is intimately related to the concept of yield farming, to which PrivacySwap is based upon.
Yield farming is taking advantage of liquidity provider bonuses usually provided in a specific token for contributing to a specific pool during a specific time. Generally, providing liquidity to DEXs can give you more profit compared to staking. The more you lend, the more you earn.
We know these principles can be quite confusing but we believe that that beautiful brain of yours can process all this info like a boss!
From our latest tutorial, Getting some PRV and counter tokens is just the first step. How to start farming and earning rewards is what comes next, so let’s dive straight into it!
What in the world are LP Tokens??
There are essentially up to two steps to farming. Depending on what you’re farming. PrivacyFarms? Or PrivacyPools? For farms, you will need Liquidity Pool (LP) tokens. For pools, you will just need that particular pool’s assets.
LP tokens are token representations of the share of assets you have provided as liquidity to the pool. To obtain LP tokens, you first need to provide liquidity to that particular pair. Below we will highlight the example of providing liquidity to the PRV-BNB pair.
First, let’s do a quick math:
To provide liquidity for a pool, you will need a ratio of both tokens. The ratio required is calculated automatically based on the current liquidity in the pool along with the current value of both tokens and their prices, usually 1:1 at current price.
So to provide liquidity for PRV-BNB pair, you’ll need both PRV and BNB!
Obtaining Liquidity Pool (LP) Tokens
Now we go to the specific steps on how to go about this:
Step 1: Go to “Trade” followed by “Liquidity” from the left menubar. Select “Liquidity” to begin adding liquidity to your desired pool.
Step 2: Select “Select a Currency” to add PRV. For this example, we are going to get LP tokens for the PRV-BNB pair. If you wish to provide liquidity for the PRV-BUSD pair instead, select both PRV at the top or bottom and BUSD on the opposite of PRV on this page.
Step 3: Key in PRV’s Contract Address in the “Select a Token” field.
PRV’s Contract Address is 0x7762a14082ab475c06d3868b385e46ae27017231
Then select “Add” PRV from the bottom so you will not need to search it again in future.
Step 4: Enter the amount of liquidity you wish to add. The ratio of tokens are calculated automatically and it is based on the current liquidity pool and the asset prices. To add liquidity, the ratio of value for each of the tokens will be 1:1.
Step 5: If this is your first time adding liquidity to this pool, you will need to “Approve PRV” first and confirm the approval via MetaMask. You only need to approve one per token, per wallet address.
Step 6: Once approved and back on the main page, now you can “Supply”.
Step 7: Review the amount you are supply. If all is good, please proceed to select the “Confirm Supply” button.
Step 8: Confirm the transaction via MetaMask by selecting the “Confirm” button.
Step 9: Once the transaction is confirmed, you may check and confirm the amount of LP tokens you have by scrolling down on the main page.
Congratulations! 🥳 You have provided liquidity and now have LP tokens. You can now stake them for PRV rewards in PrivacyFarms!
Staking LP Tokens in PrivacyFarms🚜
Through staking, you earn PRV rewards while watching TV or surfing the net; or by doing literally anything! It is a form of passive income that we encourage you to try. Staking LP Tokens is as easy as saying P-R-V.
Step 1: Head over to our PrivacyFarms page. If this is your first time staking, you must first “Approve Contract”.
Step 2: Confirm the “Approve Contract” transaction on MetaMask.
Step 3: After the transaction is confirmed and the contract is approved, you can now “Stake” your LP tokens.
Step 4: Enter the amount of LP tokens you wish to stake and then select “Confirm”.
Step 5: Confirm the stake transaction on your MetaMask and wait for your transaction to get confirmed.
Step 6: You know you have successfully staked when you are able to see PRV Earned and PRV-BNB
Congratulations! 🥳 You have staked your LP tokens for some sweet rewards!
Staking in Single Asset PrivacyPools🏊
Single Asset Pools are much simpler to stake in. They just require you to have one asset, and you can stake it.
The flow is essentially the same as Staking LP tokens except this time, you will not need to obtain LP tokens, and will be accessing PrivacyPools instead.
Trust us. It’s that easy.
Now that you know how to earn in PrivacySwap, it’s time to go and gain those rewards! Come back next week as we introduce you to some pro moves, Trade-Swap tactics and of course, our PRVeterans all-time favorite: PrivacyVaults.