How to Provide Liquidity (V3 / V2)
Add Liquidity (V3 / CLMM)
This flow applies to both creating a new V3 pool and adding liquidity to an existing one.
Go to Pools page
Go to Pools and click Add Liquidity.
Select token pair
Select v3 Positions
Choose the two tokens for the pool.
Choose fee tier
Select a fee tier (e.g. 0.05%, 0.3%, 1.0%).
For existing pools, select the fee tier that matches the pool you want to join.
If this is a new pair—or if the selected fee tier doesn’t have an existing pool—adding liquidity will create a new pool.
Set price range
Choose preset Range (simpler) based on your need.
Optional to define a custom price range.
If this action creates a new pool, you will need to set the initial price; double-check the quote direction (Token A per Token B vs Token B per Token A). A reversed price can be far from the market.
Review the pool price and confirm your range selection.
Enter deposit amounts
Enter the token amounts to supply.
The UI will automatically calculate the required ratio based on price and range.
Approve tokens
Approve each token in your wallet.
Add liquidity
Click Add Liquidity / Supply and confirm the transaction.
You will receive an LP NFT representing your V3 position.
Best Practices
Stay in range to earn fees: Fees accrue only while your position is in-range; out-of-range positions stop earning until price returns or you adjust.
Match range width to your effort level:
Wider range = more “time in range,” fewer adjustments, typically lower fee efficiency per unit liquidity.
Narrower range = higher fee efficiency near price, more frequent out-of-range events and rebalancing.
Start simple if you’re new: Use Full Range or a wider range first, then tighten as you get comfortable managing positions.
Expect inventory to shift: As price moves, your position can become single-sided (holding mostly one token). This is normal in CLMM.
Reposition with clear triggers: Consider adjusting when you’re near the range edge, out-of-range, or the position becomes too one-sided for your preference.
Choose fee tier based on volatility: Lower fee tiers fit more stable pairs; higher fee tiers can suit more volatile pairs (but volatility can push you out of range faster).
Treat LP as a strategy, not “set-and-forget”: Range selection is your strategy; performance depends on price behavior + volume + how actively you manage.
Add Liquidity (V2 / Classic)
This flow applies to both creating a new V2 pool and adding liquidity to an existing one.
Open Liquidity
Go to Pools and click Add Liquidity.
Select token pair
Select v2 Positions
Choose the two tokens for the pool.
If the pair does not exist yet, adding liquidity will create a new pool.
Enter deposit amounts
Enter the token amounts to supply.
For existing pools, amounts must follow the current pool ratio (shown by the UI).
Approve tokens
Approve each token (first time only) in your wallet.
Add liquidity
Click Add Liquidity / Supply and confirm the transaction.
You will receive ERC-20 LP tokens representing your share of the pool.
Best Practices
Know the model: V2 is full-range liquidity by default. You don’t choose a range, but liquidity efficiency is generally lower than V3 CLMM.
Expect impermanent loss (IL): Price divergence is the main risk driver. In many cases, IL can outweigh fee income.
Fees are embedded in reserves: V2 swap fees accumulate inside the pool. Your LP tokens become redeemable for more token0/token1 over time—there’s no separate “collect fees” action.
Add liquidity near the pool ratio: Liquidity provisions require token0/token1 in the current pool ratio. Large deviations may be restricted or force you to top up the other side.
Plan exits with inventory risk in mind: When you withdraw, you receive a changed mix of token0 and token1 based on price movement—not necessarily what you initially deposited.
Last updated