Adding Liquidity to a Pool on Osmosis
Now that you have staked your tokens, you can use your stTokens in decentralized finance. One way to do this is by providing liquidity to decentralized exchange (DEX) pools. For this tutorial, we will explain how to provide liquidity on Osmosis.
To see Osmosis’ comprehensive guide to Providing Liquidity, click here.
For more background context and a Stride-specific tutorial, keep reading!
A Brief Overview of Liquidity Pools:
Liquidity is a measure of how easily an tokens can be exchanged to another tokens. A liquidity pool is a pool of digital tokens that allows trading on a decentralized exchange (DEX).
The primary goal of liquidity pools is to facilitate peer-to-peer (P2P) trading on DEXs. By providing a steady supply of buyers and sellers, liquidity pools ensure that trades can be executed quickly and efficiently.
Osmosis is the largest DEX in Cosmos and Stride's main liquidity hub.
Basically, Osmosis has two separate frontends.
→ used for all on-boarded chains
→ contains a list of tokens that are registered onto the Osmosis Assetlist Registry
→ space for newly listed and unverified tokens
→ multichain DEX currently used for Cosmos-based tokens
→ users can access liquidity pools, swap tokens, generate and earn incentives.
They look very similar - be sure that you are using the correct frontend depending on the type of token and pool you are interested in.
App Page:
Frontier:
Osmosis uses the Inter-Blockchain Communication (IBC). IBC makes trustless interchain transactions possible in the Cosmos ecosystem.
You can make a deposit into the platform directly from your wallet (we will use Keplr here) once it is connected. Once the funds are successfully deposited, you will be able to approve transactions and add liquidity to incentivized pools.
Before: Explore the Stride DeFi integrations page
You can access this page from the Stride app page at the top. You will get to this link:
Here you will see a list of all of Stride's integrations that you can interact with using your stTokens. These will show you platforms on which you can borrow and lend as well as provide liquidity. For this tutorial, we will show you how to navigate to Osmosis. Below, you can see the Osmosis integration at the top of the list and a link to take you to their DEX.
Before doing this, you need to connect your wallet.
Once you connect your wallet, you will see your TVL and rewards for each platform your stTokens are on. If you select the drop down arrow next to the "Visit" or "Earn" buttons, you can see the available options for your stTokens.
For Osmosis, some of the available liquidity pools and APRs are shown here. If the stToken is available in your wallet, then you can see "Start earning" below the pool. Otherwise, if you do not have STRD or the relevant stToken, you will see "Get [Token] first." For this tutorial, we will following "Start earning" under the ATOM/stATOM pool.
Get Started: Making a Deposit on Osmosis
Use some of your stToken balance (stATOM for this example) to enter the Osmosis pool:
- From the Stride integrations page, you can go directly to the integration - you can click on the specific pool you wish to provide liquidity for. Another way to get to Osmosis is to simply visit https://app.osmosis.zone/.
- Click ‘Connect Wallet’ in the top right corner.
- To deposit your stTokens from Stride to Osmosis, select "Assets" from the left-hand column. Then, select "Deposit." Type the amount you wish to send from your available balance. Complete the transaction in your wallet.
Providing stToken Liquidity to an Osmosis Pool
After completing the deposit, you can now add your available funds to the pool. Check which pools are incentivized at https://frontier.osmosis.zone/pools to determine how you will earn rewards.
Note: Each pool has a pool ID number.
→ For instance, stATOM uses Pool ID #803
- Select "Pools" from the left-hand column. Search for the relevant stToken you are going to use to provide liquidity. If you are on Frontier, make sure your pool is incentivized by ticking "Incentivized" pools. (note: some pools are externally incentivized - this means they can be seen when "All Pools" is ticked as shown here, and will be shown in the externally incentivized list further down the page).
This is the page for the ATOM/stATOM pool. You will see the pool’s total liquidity, volume, fees, and the APR.
- Select "Add Liquidity" and you will be able to enter the amount of each asset (ATOM and stATOM) to provide to the pool. You have the choice to add an equal amount of each asset when "All assets" is ticked. If you select "Single asset" then the auto-swap feature will allow you to add just ATOM or stATOM.
Since for this example there is no ATOM balance in the wallet, we will just add stATOM to the pool by selecting "Single asset."
- Enter the amount you wish to add and select "Add Liquidity." Complete the transaction in your wallet.
- When the transaction is complete, you see the confirmation message on screen. The pool page will now reflect your new balance in the pool, your earnings, and more options for your assets. Scroll down on the page for the next step: bonding.
Bonding
- Bond your liquidity by clicking the green ‘Bond Shares’ button.
- Select the 14 days unbonding option.
- To enter the maximum amount, click on the available balance. To input a different balance, type in the text box. Click Bond to approve the transaction.
When the transaction is complete, you will see your new balance of bonded liquidity on the pool's info page. You have now successfully provided liquidity using stTokens on Osmosis.
- Pool incentive rewards are paid once per day on Epoch time at 17:15 UTC*
