How to provide liquidity on SushiSwap

Providing liquidity helps to establish a healthy economy around the RADAR token. As a liquidity provider you need to deposit two tokens into a pool to contribute to the trading pool. In this example you combine for example RADAR and ETH. These then get bundled in the RADAR-ETH pool, and you as the liquidity provider will receive LP-tokens. These serve as a receipt for your share of the RADAR-ETH pool.

Keep in mind, when providing liquidity you might have to deal with impermanent loss. This happens when the value of one of the tokens goes up a lot, while the other stays behind.

A guide on how to provide liquidity on SushiSwap

On SushiSwap users can provide liquidity in the RADAR-ETH pool, then stake their LP tokens and earn RADAR and a bit of xSUSHI for doing so. Here's who you participate:

Before you start, make sure you have a Web3 wallet. Your tokens can not be inside an exchange like Crypto.com or Binance. You need full control over your assets, using a Web3 wallet. Metamask or Wallet Connect are among the most common examples. Go to your account options on DappRadar.com to add crypto to your wallet.

1. Get RADAR and ETH tokens in proportionate amounts. Always have extra ETH to pay gas fees. The costs of those fees depend on the Ethereum blockchain activity worldwide.

2. Head to SushiSwap using this link. You will land on the below page. You can see 8697 RADAR at the top, and that means you need to add 0.0666609 in ETH to provide liquidity and get LP tokens that represent your position in the pool.

3. Approve RADAR by clicking the tab at the bottom. Once connected, your Web3 wallet (i.e. Metamask) will ask you to confirm RADAR — a fee of around $10 will be applicable. This is a one-time only fee to utilize RADAR for the first time on SushiSwap.

4. Once RADAR is approved, click Confirm Adding Liquidity.

5. Check the details. In this example, you would receive a 0.09% share of the liquidity pool and 21.7336 LP tokens.

6. Click Confirm Supply. Your wallet will once again prompt you to accept and pay a gas fee.

7. Now click the Staking tab and deposit the MAX.

8. Click approve. Your Web3 wallet will again prompt you to approve the transaction and pay a gas fee of around $10 once again.

9. Once approved in your Web3 wallet (i.e. Metamask), click Confirm Deposit. Once more, your Web3 wallet will prompt you to accept the transaction and pay a gas fee.

10. That’s it! You will see a Your Farms tab on the top left of the page. Click that to reveal the details of your stake.

Removing your liquidity from the pool also requires transactions. Considering the costs of gas fees, it's not smart to deploy very small amount of RADAR into our liquidity pool. Also, impermanent loss is always an danger.