Guide: How to add liquidity to FRAX-USDC pool on UNISWAP V3.
In this guide, we will demonstrate how to add liquidity to FRAX-USDC pool on UNISWAP V3.
Frax Finance liquidity program rewards farmers who add liquidity to FRAX-USDC pool on UNISWAP V3 with FXS.
1- How to buy FRAX & USDC Stablecoins?
- Connect your MetaMask extension to Curve.fi, then purchase the desired amount of FRAX you like to add to the liquidity using the links below:
FRAX : https://curve.fi/frax/
- USDC: https://app.uniswap.org/#/swap?inputCurrency=0x853d955acef822db058eb8505911ed77f175b99e&outputCurrency=0xa0b86991c6218b36c1d19d4a2e9eb0ce3606eb48
2- How to add liquidity to FRAX-USDC UNI-V3 pool ?
- Now you hold both FRAX and USDC, you will need to Add liquidity.
- Please head to UNISWAP FRAX-USDC add liquidity link: https://app.uniswap.org/#/add/0x853d955acef822db058eb8505911ed77f175b99e/0xa0b86991c6218b36c1d19d4a2e9eb0ce3606eb48/500
- You will arrive at this page:
- Please Follow the next steps carefully and make sure the following inputs are correctly written.
- Choose 0.05% fee tier.
- Make sure that the liquidity is set on FRAX not USDC.
- Zoom out Twice to adjust the Range.
- The Min Price for USDC per FRAX must be exactly = “0.99442”.
- The Max Price for USDC per FRAX must be exactly =“1.0054”.
- write the desired amount of FRAX you want to add to the liquidity and UNISWAP will automatically calculate the equivalent value in USDC to be added.
(NOTE: you will notice that the ratio of FRAX : USDC is not 1:1 as V2, this is how UNISWAP V3 works, but there is no IL in the stablecoin-stablecoin pools you will always get the dollar value of your liquidity back when you remove Liquidity)
- Click “Approve” for both FRAX and USDC spendings, for each Approve a MetaMask transaction will appear. Confirm it, and wait between each transaction until it is executed.
- Once FRAX & USDC are approved, click “Preview”:
- Click “Add”.
- A MetaMask transaction will appear. “Confirm” it, and wait until the transaction is executed, after that You will receive FRAX-USDC LP tokens.
Step 5 (Staking)
- Now you have added liquidity to FRAX-USDC V3 pool, you will need to stake your LPs.
- Head to our Staking dashboard https://app.frax.finance/staking#Uniswap_V3_FRAX_USDC, and connect your MetaMask wallet.
- You will arrive at this page:
- Click “SELECT” and choose the desired amount of time you like to lock your LPs, in this example we will lock for 365 days.
- Click “STAKE”.
- A MetaMask transaction will appear click “Confirm”, and wait until the transaction is executed.
- Another MetaMask transaction will appear click “Confirm”.
- Congratulations you have successfully staked your LPs you should NOW start receiving FXS rewards + FRAX & USDC fees.
About Frax Finance
Frax is the first and only stablecoin with parts of its supply backed by collateral and parts of the supply algorithmic. The stablecoin (FRAX) is named after the “fractional-algorithmic” stability mechanism. The ratio of collateralized and algorithmic depends on the market’s pricing of the FRAX stablecoin. If FRAX is trading at above $1, the protocol decreases the collateral ratio. If FRAX is trading at under $1, the protocol increases the collateral ratio.
FRAX : is the stablecoin targeting a tight band around $1/coin.
Frax Shares (FXS) : is the governance token which accrues fees, seigniorage revenue, and excess collateral value.