Step-by-step Guide: Providing Liquidity and Yield Farming on SushiSwap

When it comes to liquid staking, anyone can hold onto stakedTokens (stTokens) and earn staking rewards, while at the same time, participate in DeFi activities such as yield farming. So what exactly is yield farming? Yield farming is also known as liquidity mining, which is just another DeFi term for additional rewards given to liquidity providers via staking. There are essentially two parts to the process of yield farming: (1) providing liquidity, (2) mining your liquidity pool (LP) tokens. In this article, we will be covering (1) providing liquidity.

In summary, StakeHound’s stToken liquidity providers get to earn 3 different rewards:
1. Staking rewards (varies between tokens)
2. Trading fees (0.25% of all trades proportionate to your liquidity pool share)
3. SUSHI Rewards (governance token on SushiSwap)

For example, if Adam is to provide liquidity to ETH-stETH pool, the rewards are:
1. stETH Staking rewards at 7.87% APY
2. Trading fees of pool share: 0.25% per trade proportionate to pool share
3. Additional SUSHI Rewards: 73.65%(1y)

*As staking rewards vary from time to time, the above numbers are as of writing.

If Adam provides liquidity to a multi-staked Token pool (eg. stETH-stDASH), this means that Adam will get to earn Staking rewards from both, Trading fees of pool share, as well as SUSHI Rewards on the Onsen (depending on if it is listed). Now that you understand how the rewards work, here are the step-by-step instructions. In this article, we will be covering both parts on SushiSwap.

Before you begin, you will need:

1. MetaMask Wallet
2. ETH and/or stETH in your wallet depending on which token you are providing liquidity to.

 

(PART I) Providing Liquidity

1. Head to SushiSwap Exchange or access the correct Liquidity Pool directly (if link is provided). Click on “Pool” on the top left (if you are not directed to the right pairing).

2. Click on “+Add Liquidity“. As you can see in the screenshot, Liquidity Providers are rewarded a 0.25% fee proportionate to their liquidity pool share.

 

3. Both are input options indicated on the screenshot below. Select the correct stToken if you have already imported it previously. Otherwise, use the right token address.

Note: You can find all the token addresses from our FAQ document. Kindly note that token addresses for mainnet and testnet are different. You cannot transfer testnet tokens to the mainnet, vice versa. To put it simply, the mainnet consists of your “real” crypto, while the testnet consists of “fake” crypto. You can check which network you are on via your MetaMask wallet on your browser extension.

In this example, we are using the ETH-stETH pool. If you are providing liquidity to other stToken pools, make sure that two tokens’ contract addresses are correct. Next, key in the amount you would like to contribute to either of the tokens. The other “Input” amount will be automatically populated based on the current price of the token. Hit ‘Approve stETH‘ (screenshot below). If you already hold enough balances for both tokens of the pool, you will skip this step (Skip to step 5).

 

4. Your MetaMask extension will pop-up requesting confirmation of the transaction, along with the amount of transaction fees required. Hit ‘Confirm‘.

5. Once confirmed, move to the next step. As the prior confirmation was just to acquire stETH (for those without enough stETH/stToken balances), you would need to do another step of supplying. As mentioned in step 3, if you already hold enough balances of both tokens of the pool you selected, you will automatically reach this step from Step 2. This time, indicate the amount of stETH/stToken you would like to supply again, and hit ‘Supply’.

 

6. You will then see another screen that shows you the Pool Tokens (LP Tokens) you will receive according to your pool share. Hit ‘Confirm Supply‘ (as in the screenshot below). You will then be led to another MetaMask pop-up to confirm the transaction.

At this point, you will have completed the liquidity provision and an SLP (SushiSwap LP token) token which represents your share of this liquidity pool. If you would like to earn more rewards, you can consider staking your SLP – which is also known as yield farming.

 

(PART II) Staking your SLP on Onsen Farm

1. Head to Onsen Farm on the SushiSwap app.

2. Connect to your wallet if you haven’t already.

3. Under ‘Filter’, search for your stToken pairing. In this example, we’re searching for “stETH”. You will see a WETH-stETH pairing. You can also have an overview of the ROI, liquidity of the pool, amount you have staked and your total SUSHI earnings. On the right, you can quickly add liquidity or “Approve Staking” (which is staking your SLP). Once you already have your SLP by providing liquidity in part 1, you can proceed to stake your SLP here under ‘Approve Staking’. That’s all you really need to do.

Checking Positions and Balances

To know what your current positions and balances are, head to your SushiSwap portfolio. You have to connect your wallet to see the balances and positions. You can also access this page by heading to app.sushi.com, connect your wallet (just below Sushi’s logo on the left), and click on ‘Portfolio‘. On this page, you are able to look at the transactions you have made through Sushi and the connected wallet. At the same time, view the SUSHI rewards you would have accumulated (via yield farming, not included in this article), your liquidity pool positions, as well as the specific farms you have “staked” your SLP tokens on.

 

Removing Liquidity

If for some reason you would like to remove liquidity from a pool, you can also do so via app.sushi.com. Connect your MetaMask wallet, go to “Pairs” and search for the pair you provided liquidity to. It will look similar to the screenshot below. Now, instead of “+ Liquidity”, select “– Liquidity” in the box on the right. You can then select the percentage of liquidity you would like to withdraw.

 

Just an additional note: Every transaction and confirmation will require ETH gas fees. Plan your movements in advance and watch the market to make the best of your stTokens.

Have Questions? Join our stETH community on Discord!

How to maximize your passive income with liquid staking

For those seeking passive income, the yields provided by a traditional bank do not deliver much in the way of returns. This is why an increasing number of users has been shifting to alternatives in the crypto space that allow passive income. Liquid staking is one of these new options that provide yields for users while not locking up their assets. As things are moving fast in the crypto space, it is hard for users to keep up with new products or platforms. This article will help learn about different options that allow earning passive income and guide users on comparing various services.

The emergence of digital assets

When Bitcoin was first introduced, it popularized the concept of being in control of your funds. Bitcoin paved the way for digital assets to be recognized, which allowed newer protocols to spring. These protocols diversified crypto use cases and created new ecosystems, such as the decentralized finance (DeFi) space, built on top of the Ethereum (ETH) network. 

Decentralized Finance (DeFi)

Decentralized finance is the fastest-growing sector in the blockchain space, consisting of various financial products and services built on the blockchain. DeFi uses a combination of tokens, protocols, and smart contracts to provide access to these financial services without the need for a centralized authority. 

DeFi offers a decentralized counterpart to traditional financial services and new ones, including custodial services, collateralized loans, and lending or borrowing. The decentralized nature of these services allows them to be transparent and censorship-resistant. Because it is built on the blockchain, the counterparty risks are significantly reduced. 

Yield farming and passive income in the crypto ecosystem

Users can profit from these new DeFi services as it enables them to participate in yield farming or earn passive income in the crypto ecosystem, such as lending crypto assets. Another method used in the blockchain space to leverage on coins and earn passive income is staking. Staking is one way to gain popularity, especially for users looking to maintain the blockchain networks they use. It is the process of actively participating in transaction validation on a Proof-of-Stake (PoS) blockchain.

DeFi and staking are two of the most exponentially growing verticals within the crypto industry. Both allow users to gain passive rewards on crypto holdings. Can these two mutually exclusive verticals be bridged together?

Different liquid staking platforms

Several staking platforms allow users to enjoy the benefits of staking while also exploring the DeFi vertical. Platforms such as Rocket Pool, StaFi, and Stake DAO provide users with StakedTokens, allowing them to participate in the DeFi sector freely. Providing StakedTokens is a common denominator for all of these platforms, but what other services do they offer? 

Apart from allowing users to stake their non ERC-20 tokens and receive StakedTokens, Rocket Pool and StaFi offer no minimum amounts for staking. This provides opportunities for users to enjoy staking even if they only have small amounts of coins. These two platforms do not require any user-run nodes. Rocket Pool took it up a notch and offered its users no minimum lock-up period for staking. Stake DAO doesn’t provide these services, but it allows users to earn compounding staking interest, and StaFi insures all of its tokens. 

But what if you can enjoy all of these services in just one staking platform? 

StakeHound unlimited staking platform

Other platforms offer limited services when it comes to staking; StakeHound offers a lot more. Like others, this staking platform also provides StakedTokens that allow users to earn staking rewards while participating in the DeFi sector. Anyone can stake with StakeHound because there is no minimum entry and no lock-up period for staking. There is no need for user-run nodes, and most of all, users can earn compounding staking interest while their tokens are insured. 

Stay tuned for further info on ETH staking on StakeHound in the next few days. Users will be able to purchase stETH with their ETH. This stETH can then be used to participate in DeFi activities. This indeed raises the bar for staking platforms. More coins will also follow soon after.

 

Here’s a table comparing StakeHound vs. other offerings:

 

Criteria

StakeHound

Rocket Pool

StaFi

Stake DAO

Staked Tokens provided upon Staking

No Minimum amounts for staking

n/a

No user-run nodes

n/a

No Minimum lock-up period for staking

X

Compounding Staking interest

X n/a

Insured tokens

no n/a

Conclusion

Without platforms like StakeHound, users who want to participate in both staking and DeFi verticals would need a substantial amount of coins. Thankfully, staking platforms allow users to experience both sectors without needing a huge capital investment. But not all platforms offer the same services. With StakeHound, users can now take advantage of the best of both worlds while enjoying its variety of offerings. 

 

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