Liquidity: the building blocks of decentralized finance

Open X Swap
4 min readOct 23, 2021

When building a house, each brick is as important as the next. In decentralized finance, every dollar is as important as the next. Liquidity on a decentralized exchange (dex) plays an integral part in the health of the ecosystem. It is equally important for the customer and the dex.

Liquidity creates potential…
Liquidity on OpenSwap allows a customer to execute a token swap. The whole purpose of an exchange is being able to exchange one token for another. It is this potential that empowers you to move into tokens that meet your needs and desires.

Liquidity creates efficiency…
Providing liquidity on OpenSwap allows the dex to find the best route for trades. This ensures the customer receives the best price on a token they are trading for. Whether it is through a straight up token for token trade or through token1 -> token2 -> token3; OpenSwap automatically calculates the most price efficient route to execute the trade.

Liquidity creates opportunity…
On OpenSwap, you can stake certain liquidity pools (LPs) to earn OpenSwap tokens. This opportunity grants a customer the ability to earn significant returns on your liquidity. OpenSwap currently has APRs ranging from 3 to 300% for staked LPs and will never charge fees for deposits or withdraws on staked LPs. The rewards on OpenSwap are 100% unlocked; available to you immediate after being claimed.

Liquidity creates returns…
Providing liquidity on OpenSwap entitles you to a distribution of the exchange fees for the LP. Half of the 0.3% fee applied to all trades are distributed to customer providing liquidity.

Every bit of liquidity helps both the customer and OpenSwap. It is the basis of a decentralized exchange. We encourage and hope you will join OpenSwap as we continue to build our defi house.

User Guide for liquidity pools

Creating a Liquidity Pool
STEP 1:
Go to https://openswap.one
STEP 2: Click on ‘Liquidity’ in the top menu
STEP 3: Select two tokens and click ‘Next’
STEP 4: Click on ‘Add Liquidity’
STEP 5: Enter the amount of tokens you would like to submit to the LP. By entering in a value for one of the tokens, the other will automatically adjust to the proper amount.
Step 6: If you have not previously approved adding liquidity to the pair, you will be required to approve spending of those tokens. By approving, it allows the smart contracts to take those tokens from your wallet and put them inside the liquidity pool. Click the ‘Approve’ button to have the approval transaction populate in your wallet. If you have previously approved a LP for this pair, continue to the next step.
STEP 7: Click ‘Add’
STEP 8: Your wallet will prompt you to confirm the transaction. There will be two notifications when you submit a transaction: ‘transaction sent’ and ‘transaction successful’.
STEP 9: The created LP tokens will now be in your wallet.

Staking LPs
STEP 1:
Click on ‘Farm’ in the menu
STEP 2: Locate the LP you would like to stake and click ‘Details’
STEP 3: Once you are viewing the LP staking details, click ‘Stake’.
STEP 4: Enter the amount you wish to deposit. There are no fees to stake or unstake LPs on OpenSwap.
STEP 5: If you have not previously approved staking the LP, you will be required to approve spending the LP tokens. By approving, it allows the smart contracts to take those LP tokens from your wallet and stake them on OpenSwap. Click the ‘Approve’ button to have the approval transaction populate in your wallet and confirm in your wallet pop-up. If you have previously approved staking for this LP, continue to the next step.
STEP 6: Click ‘Stake’. You will need to confirm that transaction in your wallet.
STEP 7: Your wallet will prompt you to confirm the transaction. There will be two notifications when you submit a transaction: ‘transaction sent’ and ‘transaction successful’.

OpenSwap (app.openswap.one) is a fast and secure non-custodial decentralized exchange that serves as a one-stop-shop to buy, trade, and earn crypto whether you’re from the Harmony, Ethereum, or Binance Smart Chain networks. OpenSwap allows Harmony users to seamlessly trade peer to peer without the tokens ever leaving the original wallet and through liquidity supplied by other users of the platform. With OpenSwap, users can:
- Exchange Tokens/Coins
- Provide Liquidity to Pools
- Earn Rewards by Staking in Lucrative Incentivized Liquidity Pools
- View ‘Personal Farming Profile’ detailing your rewards including Total Stake Value, Average APR %, Total Current Rewards, and Total Current Rewards in USD
- Simplified Bridge for Tokens/Coins to and from the Harmony, Ethereum, and Binance Smart Chain Network
- Collect Fees on Provided Liquidity Without Staking
- Vote on Governance Decisions, Including Adding New Tokens

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