Pangolin is where a lot of DeFi beginners start out, and it’s a well-polished site with a slick interface, good yields, and a great DEX.
Using the DEX to swap tokens is fairly straightforward, but providing liquidity and navigating the yield may be slightly intimidating to those not familiar with DeFi.
Let’s put that right with a quick guide!
How to Mine Liquidity on Pangolin
The first thing to do is connect your wallet. For this you’ll need a MetaMask wallet (or similar), and you’ll need to have a little bit of AVAX for transaction fees.
Next, go to the pool tab and switch from Exchange to Liquidity.
Choose Add Liquidity.
At this point we need to select two different assets. Before deciding which tokens to provide, it might be worth first referring to the Farm tab on Pangolin to check out the interest rates on offer. Don’t always go for the highest interest rate available, as you need to consider factors such as the volatility of the token, impermanent loss (see the previous article for a short explanation of this), and the tokens’ long-term prospects. There’s no point getting 300% interest if the token itself collapses to near zero.
If you haven’t provided liquidity before, you’ll need to enable the tokens you plan to provide. This requires a small transaction fee and is done via your wallet extension. Once you’ve enabled them, click approved.
After a few moments, you’ll discover you now have some LP tokens in your wallet. These are the receipts you’ll use to retrieve your funds from the pool when the time comes. And will gradually increase over time as fees are accrued. You could just leave them in your wallet and let them grow, but it’s important to realise that these LP tokens are valuable assets in their own right, and can be used to generate additional yield.
Conclusion
Pangolin is a great platform for learning about DeFi as it includes a DEX, liquidity mining, and staking pools all in one user-friendly package. The Avalanche C-Chain fees are also quite low, so it won’t break the bank to play around and test things out. Other platforms might offer higher yields and more innovative features, but pangolin is a secure and stable platform, and the PNG token is one of the better reward tokens out there without taking on excessive risk, so it’s definitely worth checking out.
