How to Add/Remove Liquidity on Pancakeswap using MetaMask Wallet:
To Add/Remove liquidity at Pancakeswap then certain prerequisites are needed.
- Setup Metamask wallet at your desktop browser.
- Switch Metamask wallet default Ethereum Mainnet to Binance Smart Chain Mainnet.
- Link Metamask wallet to the Pancakeswap Exchange.
- Deposit BNB Bep-20 to buy Cas token Bep-20.
The above Steps from 1 to 4 are already explained in the following article and kindly refer to this link (https://help.cashaa.com/knowledgebase/buy-sell-cas-token-bep-20-on-pancakeswap-using-metamask-wallet).
To Add liquidity:
- Sufficient (BNB & Cas) Bep-20 tokens are needed in your wallet to provide liquidity.
- Open this link at your Metamask installed browser -> https://pancakeswap.finance/
- Please navigate to Trade and click Liquidity and then select Add Liquidity as shown in the below image.
- Choose BNB and CAS from the Input box.
- Choose how many tokens you wish to add to one half of the pair – the other half will auto-fill. This is due to the pairing needing to be of equivalent value. Details will be provided on your proportional share of the pool, which will dictate the amount of liquidity provider (LP) tokens you receive. The LP tokens will be named in accordance with the pair of tokens you provided, so in this case, the tokens would be named BNB-CAS LP.
- A pop-up window appears and check the details and click Confirm Supply.
- Metamask pop up window appears and Check the details and select Confirm.
- Transaction submitted pop-up window appears and click the View on Bscscan to check whether the transaction is successful or not.
- That’s it, liquidity was added successfully to the BNB-CAS LP.
To Remove liquidity:
- Open this link at your Metamask installed browser -> https://pancakeswap.finance/
- Please navigate to Trade and click Liquidity and then select Remove as shown in the below image.
- Choose the percentage of tokens you want to remove from the liquidity pool and then Select Approve and Remove.
- A pop-up appears and check the details and click Confirm.
- Metamask pop up window appears and Check the gas details and select Confirm.
- Transaction submitted pop-up window appears and click the View on Bscscan to check whether the transaction is successful or not.
- That’s it, liquidity was removed and your (BNB & CAS) Bep-20 tokens are returned back to the wallet.
- You will receive your share of the token pool plus any additional tokens earned from trading fees, which you get for being a liquidity provider.
- The PancakeSwap transaction fee is 0.2%, with 0.17% of that going to liquidity providers.
- Keep in mind that the number of tokens you receive may be different to what you originally deposited due to impermanent loss.
Impermanent loss
Impermanent loss is a major risk with providing liquidity to an AMM like PancakeSwap. This is a potential loss incurred by the change in the number of tokens you receive when you take your tokens back out of a pool.
This occurs because liquidity pools operate on a ratio-based algorithm – the value of both tokens (in dollar terms) must remain balanced.
If the value of one token in a pair changes, the ratio of tokens in the pool will be altered. This can result in users withdrawing from the pool with more of one token than the other. This could ultimately result in a loss depending on how the market moves.
