Although KyberSwap aggregates liquidity from different DEXs on the network, you can also add liquidity to KyberSwap-specific pools to earn fees from each trade through the pools your liquidity is in.
As a liquidity provider (LP), depositing token assets into KyberSwap allows you to automatically earn fees proportional to the amount of liquidity you added to the pool. You can extra yield on your tokens (that do nothing in your wallet otherwise) and maximize the utilization of your capital. There is no fixed fee % given to LPs, but KyberSwap’s dynamic fees are adjusted dynamically according to market conditions to maximize returns for LPs. Out of the dynamic fees collected, 90% goes to LPs and 10% goes to KyberDAO for KNC token holders.
KyberSwap is fully permissionless, meaning anyone can create a liquidity pool or add liquidity (add tokens) to existing pools, while any Dapp, aggregator, or end user can access this liquidity.
Step 1: To add liquidity, first you will need to connect your wallet. Click on the ‘Connect Wallet’ button on the top right of the page, and select which wallet you want to connect. You can connect using Metamask, Ledger, Coinbase wallet, or WalletConnect (for mobile wallets).
Step 2: After your wallet is connected, simply go to the ‘Pools’ tab and choose the token pair. All the available pools for the token pair will appear. Select the pool you wish to add liquidity to and click on the ‘+’ icon under ‘Add Liquidity’. If you are on Ethereum, make sure you have ETH to cover the gas fees.
Step 3: There are 2 options to deposit liquidity, either according to the pool ratio of the token pair (standard), or as a single token deposit. Type in the amount of tokens you want to add. This has to match the pool ratio. If this is the first time you are using these tokens, you will need to approve the use of these tokens on KyberSwap.s
Step 4: Once ready, click ‘Confirm’. After you add liquidity, you will receive a receipt token called Kyber Liquidity Provider Tokens (LP tokens) which represent your liquidity position. You will start earning fees from each trade in the pool. Fees are accumulated over time and you can receive them automatically when you remove your liquidity.
Step 5: View your liquidity positions under ‘My Pools’ tab.
The Single Token Deposits feature allows LPs to add liquidity in either token from the token pair. Our protocol will convert your single token type deposit and add liquidity according to the required pool ratio, all in one seamless transaction.
Likewise, this feature also gives you the option to remove liquidity and receive it in a single token type.
For more details, please refer to our blog post.