Question related to providing liquidity and farming

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#1

I am new to farming and LP world. I would basically like to know what is difference between providing liquidity and farming any pair.

I am also confused with the UNI pair which is shown when someone provides liquidity
With my example, I have added liquidity with 49 xDai and around 84 PRTCLE

1hive LP doubt
1hive LP doubt1172×174 19 KB

What does 63.64 value in this liquidity represents? Are those numbers of token I am suppose to get after I close liquidity? If yes, are those 63 PRTCLE token or xDai token?

Thanks in advance for clearing doubts :slight_smile:

Problem with liquidity pool
#2

check this - Honeycomb: how to stake and farm tutorial, benefits and risks

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#3

That 63.64 is your LP token

#4

Providing liquidity will only earn you transaction fee, while farming will earn you both the fee and the hny token.

It shows UNI because honeyswap is a fork if uniswap.

The 63.64 is the total number of pool token. When you add liquidity this token are minted in exchange for the 2 token you deposit.

#5

I don’t want to be too pedantic, but it is not the transaction fee you earn as an LP provider, it is the swapping fee (0.3% of the swap). The distinction is important because I know some people get the impression that the fees liquidity providers get on xDai are lower because the transaction fees are lower, but this is not true.

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#6

Thanks for correcting @onbjerg,that’s really what I mean. I was just typing fast and I subconsciously type transaction instead of trade fees. :face_with_hand_over_mouth:

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#7

They are liquidity provider tokens, they represent your share of the liquidity pool for a chosen pair and are used to distribute swapping fees to all liquidity providers. Each honeyswap pair has its own unique liquidity provider token even they’re all displayed as UNI-V2.
The quantity of LP you get when providing liquidity to a pool follows this formula:
2020-10-21-163857-WINWORD
Where Tokens^Pool is the number of tokens already in the pool (PRTCLE or xDAI) and LP^Pool is the number of LP tokens associated with the pair (you can get the value by going the contract details on blockscout).

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