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all right everyone here is your tutorial on how to add and remove liquidity from uniswap hi everyone welcome to a new episode as promised today is that tutorial on liquidity providers on uniswap if you are someone that is trying to decide if this is something that will work for you that will be profitable for you that it's all worth it i highly recommend that you check out my most recently posted video talking about impermanent loss also known as divergence loss it'll help you have a much more realistic expectation of this whole experience so anyway let's get into it so we're going to go to uniswap.org and go ahead and click on the uniswap app tab on the upper right hand corner it will bring you to the uniswap decks really and this is also where the liquidity providers go um so right off the bat you know you'll notice you have a couple different options for pooling your tokens you have this pool option and also right next to it you have the uni tab option the uni option so for the pool option this is kind of the original way to add liquidity to uniswap you can either add liquidity to already existing pools by just choosing the add liquidity tab you'll be then prompted to choose which different coins you want to be adding liquidity to that pool that falls within that range or you can also create your own pair creating pretty much creating your own liquidity pool based on the tokens that you are going to be depositing now what's really important here is that if you are creating your own pair creating your own liquidity pool you are determining the price of each token based on the ratio of each token that you are depositing now if you watched my last video again talking about impermanent loss i spoke a little bit about this the price of your coins are based on the ratio of each coin that you have deposited initially into that liquidity pool um and so here if you are creating your own you're going to want to be competitive because if your prices are way out of whack um number one it's probably it's probably going to be quickly drained one side for the other or just not touched whatsoever and if your whole point is creating your own pool so that you have a larger per you make up a larger percentage of that pool so then you get a larger percentage of that 0.3 trading fee that is paid out you're going to want to be competitive additionally if you're only supplying a very small amount of coins you're not going to be providing a lot of liquidity for people to be trading within your pool and that is has been the you know the stick in the side of any decentralized exchange is a lack of liquidity so if you want to create your own pair create your own pool on uniswap you're going to want to have have to deposit a decent amount of coins to facilitate a decent amount of trades which will then be paying you that point three percent of those trades um so anyway this pool section that is the original way to do this it is very the the actual process of getting your coins from your wallet into the liquidity pool is exactly the same whether you're using this pool option or the uni option um toby and i decided to go ahead and provide liquidity for this uni option on the tab it's saying it's pretty much saying that's how you're mining your liquidity mining uni tokens so what this is it's their introduction of of how they're going to be dispersing these uni tokens basically what they have is currently four pools that are available you can have ethereum and dye pool ethereum usdc pool ethereum usdt pool and an ethereum and wrapped bitcoin pool um and this will run until november 17th so as of uh right now today me recording this you have about about 45 days so for this uni liquidity mining option you will also be rewarded uni tokens for having participated in these so toby and i we did this on september 20th we let these sit for about a week and a half and we took them out on the 29th and we received the 0.3 trading fees in the form of the tokens that we had contributed to that pool we chose the ethereum and wrapped bitcoin pool um so you know when you contribute to a liquidity pool and the regular pool section the 0.3 trading fees are paid back to you in terms of the two tokens um that you had contributed and it's the same in this one as well but i believe because i don't think that we receive the uni tokens yet i believe when this event runs out that's when you'll be rewarded your uni tokens for whatever percentage of the pool you'd contributed and for however long your liquidity was in that pool so as always when you're working with unit swap or decentralized exchanges that are much like this especially like all of these ethereum based decentralized exchanges like one inch you're going to need to connect a wallet if you saw my my video on metamask you'll know how i feel about that so a an option that i've been using with uniswap is the portis wallet um and it's been working just fine so we go ahead and click on the uh add ethereum and wrapped bitcoin liquidity tab and you go ahead and you choose exactly again because this ratio has already been determined and you need to be depositing the same dollar value of the two tokens that are involved you're going to need to you know decide for yourself which one you'd rather in what terms of each coin you're going to be depositing and also you're going to notice you're going to have to approve uh the token if you're if for this one again because it's ethereum and wrapped bitcoin wrapped bitcoin being that erc20 token you're you what you're doing is you're pretty much calling or confirming the use of that token from your ethereum wallet um so it's really just it's about granting permission for uniswap to be accessing the token in your wallet the network fee is estimated to be two dollars and 46 cents for this pretty much every action that you're having to do to um add liquidity you're going to have to do in pretty much the reverse order to remove liquidity so there's ultimately two transactions for adding it you have to confirm the use of the token and you also have to confirm you actually moving your your coins from your wallet onto the smart contract that is the liquidity pool of uniswap and so each of those transactions will cost you money and so that is something you're going to have to also calculate into if it's going to be profitable for you especially if you aren't able to provide a whole bunch of value in terms of tokens like a thousand dollars or less i'd say it's probably not worth it so you go ahead and wait for that to confirm and you can go ahead and you can see that on ether scan but shortly after that you will see you will be confirming your supply you'll see the amount of ethereum that will be deposited the amount of wrapped bitcoin that will be deposited or whichever two tokens you are interacting with again it re-emphasizes the price of each token based on the ratio um based on themselves of this pool and they also show you your percentage share of the pool so from then they give you all that information knowing what your percentage will be you go ahead and confirm it will prompt you to confirm it within your wallet itself and the fees for this one was about ten dollars estimated fees were about ten dollars so totally is about twelve dollars to do this whole thing and you'll see when i remove the liquidity how much profit we made that was just to add it so i definitely would take time it would definitely depend on your profitability would depend on how long you are adding the liquidity for and of course the kind of price movements that are happening um with the tokens of your liquidity pool which is why these stable coins are like a huge thing for these liquidity providers because you know at least one coin is going to be stable compared to the other um if you're doing like this one ethereum and wrapped bitcoin neither of those are really stable coins comparatively um so there is argue you know you could say there's definitely a lot more risk with that one as well so then let's say you've had this sitting for a little bit and you just want to check it out see how it's been going you're going to need to um you know go to app.uniswap.org connect the same wallet that you use to provide this liquidity if you lose access to that wallet that's really unfortunate because i don't know that there's a way to really claim it without access to that specific wallet so definitely make sure that you're taking good care of how you are storing and securing that ethereum wallet but let's say you want to visit back just to check in see how it's happening so you go to the pool option and you'll see your liquidity and it should show your liquidity pair right there that you're involved with if you're involved in multiple they should be listed accordingly if it's not showing you can go ahead it says don't see your pool you joined import it and there you can search through the coins if you know the legitimate contract address of the token that you are providing liquidity for you can input that into the search bar up above additionally um you know there's all the list of tokens and i definitely talked about this as well for my tutorial on just how to trade on uniswap it's very similar with those lists that i was talking about you can choose which curated list of tokens are being displayed for you to participate in but anyway that's a really easy if don't freak out if you don't see your liquidity showing up there's a really easy way for you to find it you just have to kind of manually add it it is all possible and it's all very easy okay so now let's say you are ready to take out your liquidity you've been keeping an eye on your fees maybe you you're not getting what you thought you would maybe you've made enough and you want to take it out and do whatever you want with it so similarly like always you go to app.uniswap.org click on the pool option find connect your wallet as usual you're always gonna have to connect the wallet that you have been interacting with for the tokens on this pool so once you see your pool pop up you can click on the manage button again you can see uh how your ratio of coins have changed because again when it comes to removing the liquidity of your tokens you're probably not going to get the same exact amount of the two tokens back as you deposited there's probably going to be slightly more of one and slightly less of the other just because in real life no one makes perfectly equally balanced trades for one another like some people maybe more people are going to buy more wrapped bitcoin maybe more people are going to buy want to buy ethereum again for our this tutorial we did the wrapped bitcoin and ethereum liquidity pool so that was the case we ended up coming back with slightly more ethereum and slightly less wrapped bitcoin so again it also plays into that impermanent loss or divergence loss um whatever that coin is doing on the outside markets there's probably a reason why more people want to buy more than the other and just their timing of removing that liquidity will affect kind of the value that you're getting also when you're removing it but again the point three percent fees that you've been receiving in the form of each of those tokens usually evens it out as well as now you've also been if you participated in these four pools that are available you've also been liquidity mining uni tokens so at the end of this period again on november 17th i believe is when you will be receiving those tokens that are associated they'll probably be airdropped to the wallet uh that was used for this pool so you'll see after about a week and a half of a decent chunk of money quite frankly being here within this liquidity pool we earned 15 which is pretty good especially if you are considering on leaving these coins for a while um you know volatile happenings in the crypto space are definitely happening due to some recent things with bitmex so yeah that's another risk for these liquidity providers is volatile price movements within the crypto space but anyway regardless this is what we made and so for the purposes of this video i think we're going to probably come out about even of paying for the fees for the transactions versus that now i'm not sure that the transaction fees for ethereum will always be this high they definitely fluctuate um so maybe you'll be lucky and you can catch it on a day that the fees are quite low and then that won't be such a negating factor for your profits so again so you can go to your liquidity and go ahead and click on the remove option and we're just going to go ahead and remove the maximum amount and they will show you how much of each token you will be getting and you can compare that to the amount that you had deposited getting slightly more ethereum and slightly less wrapped bitcoin it wasn't anything dramatic by far so you're going to go ahead and have to confirm that and it is going to cost you in form of a transaction fee so the estimated network fee is three dollars it usually ends up being quite less than that but at the end of all this we'll see and if you'll see there i actually have a balance of this wallet this ethereum wallet that i'm interacting with the portis wallet has a balance of nine dollars and 32 cents it's probably not enough to cover this fee as well as the next fee of actually removing your coins from the smart contract of the liquidity pool and into your wallet that is going to be a fee as well and that is going to be a much more expensive fee comparatively to this so it's always that reminder that you're going to need ethereum in the wallet that you are interacting with to cover the cost of the fees so i actually had to go ahead and add more ethereum to this wallet so really what you're doing here for this transaction is redeeming your uniswap liquidity provider tokens for your liquidity that you had provided to the liquidity pool so it's pretty much your your voucher for your coins back so that's a transaction happening there that costs about three dollars once that has been confirmed you can go ahead and remove your liquidity by clicking remove again you are confirming the coins um that you are being returned back to you also the prices at which they are comparatively compared to that ratio so this estimated network fee will be 16.73 again i didn't have enough money because i already spent i had nine dollars i spent three of those on the first transaction to redeem the tokens and now it's another 16. so i have to send more ethereum to this wallet and actually portis makes it quite easy um when they they give you some options i believe to pay for it with your debit card but you can also click on the transfer funds link and it'll show you your public address right away so it makes it pretty easy you don't have to go in and try to find it so i confirmed it within the portis wallet and then you can view on etherscan uh that transaction so you can see you know how long it's gonna take and for sure it's going through additionally the amount of coins that are being sent um into that wallet and you can also double check the transaction fee which for here again they quoted 1539 but the actual cost was nine dollars and 20 cents regardless even though that's what the transaction actually ended up being you have to have enough to cover the estimated transaction fee you have to have more than it might actually end up being and that is how it's done whether or not you are mining your liquidity mining unit tokens or you're just providing liquidity for any two random tokens on uniswap that is the process i hope that this video was informative for you helped you get a better visual what to expect if you haven't subscribed to this channel yet and you found this video to be helpful i suggest that you hit subscribe because i'm doing videos i'm putting videos out several times a week and on mondays my husband toby and i go live at noon eastern time those are always pretty entertaining so go ahead and check us out hit subscribe with that bell notification so you can be notified when more videos like this come out in the meantime i hope you're staying happy and healthy i'll see you soon