How to Provide Liquidity

Become FEED/BNB Liquidity Provider

Important Disclaimer on Risk of Impermanent Loss ("IL"):

In providing liquidity, the price of the tokens in a Liquidity Pool can diverge in any direction. The more divergence there is, the more impermanent loss a user (i.e. Liquidity Provider) suffers. This is called impermanent because it can only be temporary. When the price of the tokens returns to the original value the user had invested, the loss is erased. This is a common occurrence in Liquidity Pools, but it can become a permanent loss if the user withdraws their liquidity and absorbs the losses or if the price continues to diverge and the user loses more tokens as a result.

Due to market volatility, losses can become permanent in the short run. This severely affects a user’s investment in a pool when it leads to negative returns. This occurs due to how the AMM price the value of tokens. If the AMM is not directly connected to external markets, then when the price changes in other exchanges they do not automatically adjust their pricing.

Credit: https://www.datadriveninvestor.com/2020/11/11/impermanent-loss-in-defi-the-risks-involved-in-providing-liquidity/

Why providing liquidity is important to the project if there are risk of losses you might ask?

That is because to ensure "price stability" a lot of liquidity in the pool is required to absorb trading volumes. This helps price movement become less erratic. Also helps investors that have large amount of capital to invest join us without incurring massive "slippage", ie.: driving the price up massively, or down massively when they want to sell.

Feeder's founders have provided their own capital together with 5 million FEED tokens as initial liquidity in the pool, but as demand or supply gets larger, it's unlikely to support trading/investing on its own. We need your help!

What's in it for you?

  1. You'll earn 0.17% of the trading value as a fee, on PancakeSwap, which is deposited right back into the pool.

  2. You can use your LP token (which is what you receive as, say, a receipt of your share in the pool) to FARM more FEED on our platform. Most platforms give large distribution to farmers to compensate them for the IL risk and the additional capital (BNB) required to provide liquidity. So does Feeder.finance.

  3. Your FEED investment is less volatile and risky to hold. Less surprises.

Where/How to Provide Liquidity

Step 0: Please scroll back up and read the above if you haven't already. It's uber important you know what you're getting yourself into.

Step 1: Where to Provide Liquidity

To provide liquidity, make sure you've already swapped some FEED into your wallet. If you haven't already and don't know how, please go to the "How to Buy FEED" section.

On the PancakeSwap platform, instead of being on "Swap" tab, move over to the middle tab called "Liquidity" (See Figure 1)

Figure 1

Step 2: Providing Liquidity on FEED-BNB LP

Click on the blue button called "Add Liquidity" shown in Figure 1 and you'll be sent to an interface similar to the swapping interface (See Figure 2)

Now what you'll likely need to do is paste the contract address into the search bar again after clicking on "Select a currency". Use this FEED contract address: 0x67d66e8Ec1Fd25d98B3Ccd3B19B7dc4b4b7fC493

Figure 2

Once that's done you'll see the two pairs shown as per below:

Figure 3

Hit "MAX" on FEED or how ever many you'd like to deposit into the liquidity pool. Then hit "Supply" at the bottom. You'll be prompted to "Confirm Supply" (Figure 4) ; go ahead and do that.

Figure 4

Metamask will prompt you to confirm, hit confirm, if that's what you want to do.

Step 3: Congratulations! You've just passed your Chapter 2 of DeFi!