Update January 2021: Please note that ADX farming finished on 28.12.2020!
Posted by AdEx Network on November 19th, 2020
Earlier this week we announced AdEx farming: a great way to earn ADX rewards while providing liquidity on Uniswap and Balancer.
Before You Farm
If you are familiar with liquidity mining and yield farming, this is nothing new for you; but if you’re new to the DeFi world, the process may seem a bit complex. This is why we created this tutorial for you.
Important: Before engaging in farming, make sure to understand how it works by checking out this article by Coinmarketcap, this explainer of the risks by Binance or this video on impermanent loss. Being a liquidity provider is much riskier than staking, and if you’re not familiar with it, we recommend staking instead.
If you feel comfortable enough to participate in AdEx farming, continue reading this tutorial.
Step 1: Provide Liquidity
In order to get ADX farming rewards, you need to provide liquidity to any of the participating pools on Uniswap or Balancer.
To decide which pool to go into, you have to look at multiple factors, such as total staked funds in the pool, total rewards allocated to that pool, what assets you’re currently holding, etc. - some of this information is accessible on our Farm page.
When you become a liquidity provider, you will receive a special LP token that represents your share in the given pool. This is the token you’re going to stake on our portal. You do not need to add this token to Metamask - the staking portal is going to detect it automatically for you.
To add liquidity to ADX-ETH on Uniswap, you need to go to the ADX-ETH pool there, then click on “Add liquidity” and follow the steps.
Please note that you can only add equal values of ETH and ADX: for example if you want to add 10,000 ADX, you will need to also add 5.683 ETH (assuming 1 ADX = 0.00056831 ETH). In other words, if you want to add $1,000 in ADX tokens, you will also need to add $1,000 in ETH.
Once you are ready with this, move on to Step 2.
Unlike the ADX-ETH pool on Uniswap, the ADX-yUSD pool on Balancer keeps a 30%-70% balance of assets (30% yUSD, 70% ADX).
Another difference is Balancer gives you the option to either add two assets to the pool (in a 30%-70% value ratio), or only add a single asset that will be automatically converted to a 30%-70% split of the two assets. For example, if you add 10,000 ADX, 30% of that will be immediately converted to yUSD. If you add yUSD, 70% of this will be converted to ADX - such that the LP token you receive always represents a 30%-70% split of these two assets.
If you’re unfamiliar with what yUSD is, we recommend this explainer. In short, it’s a share of a pool of multiple interest-bearing stablecoins: it behaves like a stablecoin but also generates interest (currently around 10% per year). This interest is incurred in the form of yUSD value itself growing: for example, yUSD was worth $1.13 back in August, and it’s worth $1.18 now.
If you want to get yUSD, the cheapest way (in terms of gas) is to purchase it through Uniswap, using the token address:
Finally, to actually add liquidity on Balancer, go to this pool, connect your wallet, click “Add Liquidity”, pick “Single asset” or “Multi asset” and follow the steps.
*WARNING: yUSD does not show up by default in Metamask - we recommend checking your yUSD balance on Etherscan. Furthermore, yUSD is often called different names such as “yearn Curve.fi yDAI/yUSDC/yUSDT/yTUSD” on Etherscan or “yyDAI+yUSDC+yUSDT+yTUSD” on Balancer.*
Step 2: Stake Your LP Token
Finally, go to the staking portal Farm page, connect the same wallet you used to add liquidity and select the pool you entered. Then click on “Deposit” and deposit your LP token. We recommend depositing all of it, as you can get all of it back at any point without a lockup period.
Starting Friday afternoon, you’re going to see ADX rewards you’re incurring on the Farm page. Note that once you stake your LP tokens, both Balancer and Uniswap will stop showing your position - don’t worry, this is normal and you can check your liquidity position (i.e. your share of the pool) on the staking portal.
We are preparing video tutorials on farming too, so stay tuned!