UniSwap is a decentralized exchange that allows to swap tokens through the Ethereum network. It can be used without registration and does not require any identity verification.
Anyone can add liquidity and share the income according to the committed liquidity. UniSwap charges a fee of 0.3% per swap, this fee is then distributed among the users who make liquidity available on the different pairs.
Therefore, if you provide, for example, 50% liquidity to liquidity pool, you will get 50% of the transaction fee. You thus generate passive revenues.
We will see in this tutorial how to add liquidity to a KRL liquidity pool. Note that you will have to put the same amount in KRL and ETH (this can be USDC or any other ERC-20 compatible pair, ETH is the most used pair), this is automatically calculated by UniSwap.
In our tutorial we will add liquidity on the KRL-ETH pair.
1- Go to the UniSwap.info page of the KRL-ETH pair by clicking here
At the top right click on "Add Liquidity".
2- Select the amount you wish to add to the liquidity pool
Enter the amount in KRL that you want to add to the liquidity pool and UniSwap will calculate the amount in ETH that you will also need to provide (equally KRL-ETH).
3- Send the funds to UniSwap
You must now send your funds to the UniSwap smartcontract by clicking on "Supply".
4- Confirm the supply that will be added to the liquidity pool
Confirm the addition of your liquidity to the pool by clicking on "confirm supply". If you are using Metamask you can adjust the "gas" so that the transaction is done faster on the Ethereum network. Once the transaction is confirmed your liquidity pool will be added.
How to withdraw liquidity from UniSwap?
Go to the UniSwap interface in the pool section (top left on the UniSwap website).
You will see a list of the liquidity you offer.
1. click on "Remove Liquidity".
2. Select the amount you wish to withdraw from the liquidity pool.
3. Confirm the removal.
4. Confirm the transaction.
5. Proceed to the final confirmation, your funds will then be returned to you.
Conclusion
Adding liquidity to a KRL pool is a good way to generate passive income because you get a percentage of the generated fees. A high liquidity on a token avoids high price slippage, in other words UniSwap users will be able to easily acquire KRL at a price equivalent to the market price.
For your information the KRL-ETH pool generated +1.2% passive income in less than 50 days for each participant in the liquidity pool.
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