It has become my passion to write my thoughts and share new ways to earn a little Crypto while you are on your devices.
The average person is on their phone for around 5 hours a day. This time is normally wasted on sites such as Facebook, Twitter, and we can not forget TikTok. This time is wasted and you can never get it back. I started to realize this and started to wonder what I could do in my free time that could broaden my mind and make me a little bit a Crypto while I do it.
Ever since I have started doing this, I believe, my mind has opened and my portfolio has widened by a lot. I have been able to learn about this up-and-coming financial system while I move small amounts of Crypto I have earned. I have earned from faucets, blogging, taking pictures, and posting content. There are so many different ways to earn Crypto nowadays it is mind-blowing.
I suggest everyone who is reading this, take a second to look at how long they spend on their devices, and on sites and app's that really do not give, but instead take so much.
You will want to change your ways once you see all of the time you waste on these apps and maybe start using that time to learn a new trade and get to trading ; )!
I want to go over the process of providing liquidity and the positives and negatives that come with it.
Liquidity means the availability of liquid assets to a market or company.
So providing your crypto to a liquidity pool is helping exchanges stay alive and make it easier for people to use.
Now I am in no way a pro at any of this. I actually just started learning and getting involved with liquidity over the past couple of months. I have learned a lot over those months and I would like to make the process of providing liquidity easier and less stressful for the average person like me. At first, I was so overwhelmed with everything there was and all of the different options you have, I never got around to giving it a try.
I finally realized the amount you can earn and the amount you can learn by providing liquidity.
I will explain liquidity by using Alcor Exchange and using the WAX mainnet.
I want to use this as an example because I believe WAX is going to explode in the future because of how user-friendly everything is. Also, the speed of this Blockchain is by far the fastest I have seen when it comes to Crypto gaming. One last thing is Alcor Exchange is user-friendly and by far one of the easiest exchanges I have used.
You will have to own a little bit of WAX to be able to provide liquidity and I will explain why and what you need to do to get started. After you create your WAX wallet you can either use ExchangeME on the WAX site or you can use Kucoin exchange.
First, you need to find out what two cryptocurrencies you would like to provide liquidity too. I do this by first checking and seeing which two have the highest exchange rate and go from there. You can find this by clicking on Markets.
After I have found the one I think will do good in the future and is doing fairly well right now, I make a choice. I normally stick with WAX/AETHER or WAX/KBUCKS because I make the most from those games, which makes me feel like other people do as well and trade their earnings. There is also a new and upcoming project called CAIT. The link is connected to their faucet where you can claim 4 different Tokens. This will at least get your foot in the door and get some Crypto to play with. Since this Crypto has been released I have been moving my Liquidity to WAX/CAIT. The amount you receive is higher since it is a newer project and fewer people have provided it. Also, they give you extra CAIT on top of your liquidity earnings. Keep in mind it is a new project and anything can happen. Here is their site that actually explains what it is about.
Once you have made a decision you need to go to the swap page and swap and make sure you have equal parts WAX and AETHER or whatever pair you have decided to use.
Once you have gotten equal amounts of each you will go over to + liquidity. This will allow you to see how much you will make. Once you have gone over to add liquidity you will be able to see how much of the pool share you will receive from your liquidity. I have highlighted the amount you will earn in yellow at the bottom of the next picture. (I want to let you know how you will not earn a lot at first but with time and providing liquidity every couple of days you will start to see a passive income forming.)
Like I said you will not see a good amount of passive income come in until you have provided enough liquidity for you to get the gains you want. As you can see, you will not earn much at all from this amount, but as you can also see in this next picture, you can start to see that pool share percent go up after a short period of time.
Also, keep in mind that you have a lot of different possibilities when it comes to providing to liquidity pools.
If you choose different pairs you will also get a higher or lower pool share depending on the amount that is provided into that pool. The more that is provided as a whole in the liquidity pool the smaller your share will be and the less that is provided the higher your share will be. So keep that in mind.
If everyone provides liquidity to WAX/AETHER then everyone's share will be smaller. I am trying to keep an eye out for the highest trading but lowest liquidity provided.
As you can see providing the same amount of AETHER but with KBUCKS gives you a higher pool share. These are all things you want to keep in mind when providing liquidity.
I hope I have done a decent job at explaining liquidity and how it can be beneficial to you and your portfolio. It is not all peaches and cream though, as they say.
When it comes to providing liquidity there is a thing called impermanent loss. Now, this is not entirely bad, there is a possibility you will actually lose money instead of making it.
This is kind of difficult to explain so I am going to use a segment I found on the internet because I think it explains it the best. I will discuss what I think about this after you take a second to go over this and get an idea of what impermanent loss is.
From my understanding, it is saying that by providing Liquidity you could lose in the long term if there is a substantial price change in one of the Tokens you are providing liquidity for. You will not lose your Crypto but you will end up missing out on a price jump.
When you provide liquidity it makes it so the two tokens you are providing for stay consistent, if that makes sense.
This is something hard to explain and is something you will probably have to do more research on. It is not saying you will lose any investment per se, it is saying that at times it would be better to just hodl and not provide liquidity. This is hard to decide so I suggest watching the market close while you are providing.
I hope everyone has enjoyed my article and if you have please click the like and follow button to help me grow.
If you have any thoughts or if I am wrong about anything please leave a comment and let me know. I am very passionate about all of this stuff and want to make sure I am doing it right and making the most I can and not sending my readers down the wrong path. I have been making a decent amount from this so far so it does work. I just want people to be careful when investing and do their own research and make their own decisions based on their experiences and life goals.
Good luck out there and may the force be with you ; )
Lead image by Unsplash
