Uniswap Exchange Tutorial: Adding POA20 liquidity

Adding POA20 to the Liquidity Pool

Adding liquidity requires depositing an equivalent value of ETH and the ERC20 tokens (POA20) into the ERC20 token’s associated exchange contract.

The first liquidity provider to join a pool sets the initial exchange rate by depositing what they believe to be an equivalent value of ETH and ERC20 tokens. If this ratio is off, arbitrage traders will bring the prices to equilibrium at the expense of the initial liquidity provider.

All future liquidity providers deposit ETH and ERC20’s using the exchange rate at the moment of their deposit. If the exchange rate is not appropriately correlated to external markets, there will be a profitable arbitrage opportunity that will correct the price.

Step 1: Select ‘Pool’ on the Uniswap bar.

Step 2: Select ‘Add Liquidity’. In the pop-up window, also select ‘Add Liquidity’.

Step 3: Select ‘POA20’ as the currency to be deposited into the liquidity pool. Enter the ETH value you want to deposit, and the equivalent value of POA20 tokens will be reflected. Finally, select ‘Add Liquidity’ to proceed with adding to the pool.

Step 4: Confirm the transaction via MetaMask.

Step 5: Confirm your updated balances on MetaMask and Uniswap.

Note: You may choose to remove your liquidity by selecting ‘Remove Liquidity’ in Step 2.

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