Step 1: You need to hold LP tokens in your wallet corresponding to the farm you wish to invest into;
Step 2: Click on the farm into which you wish to deposit;
Step 3: If this is your first time depositing you will need to approve spending of LP tokens in your wallet;
Step 4: Click on '+' and choose how many LP tokens you wish to deposit. You can also max out the amont by clicking on 'Max'. Click 'Confirm' when you're happy with the chosen amount;
Step 5: Confirm the transaction in your wallet;
Step 6: Deposit in farm complete! You will now receive bonus FISH rewards which you need to harvest manually. Deposit FISH in the locked vaults for a maximum return on your investment!
For any DeFi platform, liquidity is crucial to create a healthy ecosystem. More liquidity available on SwapFish means more users can trade tokens at low fees.
SwapFish farms are designed to incentivize users to provide liquidity for their favorite token pairs. Users who create and stake their liquidity provider tokens in farms on SwapFish will earn trading fees and FISH utility tokens. The return a user can expect from investing in any given farm over a one year period is represented as the Annual Percentage Rate (APR), that is the rate of return on staked assets, exclusive of the effects of compounding. These are subject to change based on a number of different factors.
Farm APRs are determined by three main factors: the price of the farm LP tokens, the price of the reward token (FISH), and the amount of farm LP tokens in the pool.
- If the price of the LP tokens increases, the APR will decrease, because each LP token is worth relatively fewer reward tokens (FISH). In other words, each FISH earned is worth relatively less if the price of the underlying LP tokens goes up.
- If the price of the LP token decreases, the APR will increase, because each LP token is worth relatively more FISH tokens.
- If the price of FISH increases, the APR will increase, because the total value of the reward tokens received for the same number of LP tokens has increased.
- If the price of FISH decreases, the APR will decrease, because the total value of the reward tokens received for the same number of input tokens has decreased.
- If the number of LP tokens staked in a farm increases, the APR will decrease, because the same amount of reward tokens are distributed against more LP tokens.
- If the number of input tokens staked in a farm decreases, the APR will increase, because the same amount of reward tokens are distributed against fewer LP tokens.
Additionally, a portion of the farm APR is calculated from the fees distributed back to liquidity providers. If a liquidity pool is popular among investors and a lot of trading takes place, more fees will accrue to liquidity providers and the APR of the farm will increase. More info regarding the allocation of fees collected by the SwapFish protocol can be found in the next chapter.