Classic Pool Creation

Create An Amplified Pool With Custom Fee Settings

Introduction

In order to participate in a KyberSwap Classic pool and earn fees, you first need to add liquidity to the pool. You can add liquidity either to an existing pool, or as part of creating a new pool. This guide describes the steps required to create a new pool by adding liquidity.

Liquidity Provider Flow

Still deciding on which solution suits you best?

• Overview: Earn Yield By Contributing Liquidity

• Detailed comparison: Classic vs Elastic

Next steps

1. Connect Your Wallet

2. Switching Networks

3. Classic Pool Creation <-

4. Add Liquidity To An Existing Classic Pool

5. Yield Farming On Classic

6. Removing Liquidity On Classic

Adding liquidity to create a new pool

Step 1: Create a pool

Ensure you are on the correct network, and then click the “Create Pool” button at the top right of the screen.

Classic Pool page

This will bring up the Create a new pool screen, but it will be fairly empty until the parameters of the pool are properly specified.

Pool creation screen

Step 2: Select tokens to add

Select the pair of tokens you would like to create the pool with. You can choose from already whitelisted tokens or import any token on your chosen network.

Select token pair

Non-standard tokens

As a permissionless protocol, KyberSwap enables users to provide liquidity and market make for any token implementing the ERC20 interface. While this standard interface enables interoperability between various DeFi protocols (including KyberSwap), token teams are still able to specify customized token mechanics (i.e. supply/demand, tokenomics, etc.) which could result in unexpected outcomes.

Note that the token mechanics are specified as part of the token's smart contract hence KyberSwap does not have any control over specific token implementations. Some examples of non-standard tokens are:

• Fee-on-transfer (FOT): For every token transfer, a percentage of the tokens are burned or distributed to various wallets.

• Rebase: Token supply is adjusted periodically to maintain price stability.

• LP: Tokens representing a proportional claim of a liquidity pool's assets.

To ensure the safety of our user's funds, KyberSwap Classic does not support non-standard tokens. Please do your own research before providing liquidity using such tokens as KyberSwap was optimized to handle the standard ERC20 implementation.

Step 3: Enter token amounts

Specify the token amounts to contribute as liquidity to the new pool. Upon entering the two token amounts, the price ratio of the tokens are also displayed at the bottom left of the screen.

Do note that KyberSwap Classic enables users to configure their pool according to their preferred price ranges hence LPs are able to define the starting price of their pool.

Token amounts and price ratio

Price deviations

As a safety precaution, KyberSwap Classic will prompt the LP if the specified pool price deviates significantly from the market price.This is because any liquidity additions that significantly deviates from the market price would immediately result in impermanent loss as arbitrageurs sweep up the significantly discounted token from the position.

Step 4: Select AMP value

Upon selecting a price ratio, you will then be prompted to enter an AMP value. AMP refers to the amplification factor which enables Classic pools to be siginificantly more capital efficient when it comes to generating yields. By specifying an AMP greater than 1, notice that the active price range also changes accordingly. You will earn any market making fees for trades that happen within this price range but your position will become inactive if trades happen outside this interval.

Please refer to Amplification Factor for further details on selecting an AMP value.

Select AMP and corresponding price range

Step 5: Select fee tier

You will then be required to select your fee tier.

Select fee tier

KyberSwap currently offers the following tiers to cater for different token pair correlations:

Fee tier options

1. 0.008% fee tier: Best for very stable pairs The 0.008% fee tier is ideal for token pairs that typically trade at a fixed or extremely high correlated rate, such as pairs of stablecoins (e.g. DAI-USDC). Liquidity providers take on minimal price risk in these pools, and traders expect to pay minimal fees.

2. 0.01% fee tier: Best for very stable pairs The 0.01% fee tier is ideal for token pairs that typically trade at a fixed or extremely high correlated rate, such as pairs of stablecoins (e.g. DAI-USDC). Liquidity providers take on minimal price risk in these pools, and traders expect to pay minimal fees.

3. 0.05% fee tier: Best for stable pairs The 0.04% fee tier is ideal for token pairs that typically trade at a fixed or highly correlated rate, such as pairs of stablecoins (e.g. DAI-USDC). Liquidity providers take on minimal price risk in these pools, and traders expect to pay minimal fees.

4. 0.3% fee tier: Best for most pairs The 0.30% fee tier is best suited for less correlated token pairs such as the ETH-DAI token pair, which are subject to significant price movements to either upside or downside. This higher fee is more likely to compensate liquidity providers for the greater price risk that they take on relative to stablecoin LPs.

5. 0.5% fee tier: Best for weakly correlated pairs The 0.5% fee tier is best suited for weakly correlated token pairs such as the ETH-LINK token pair, which are subject to price movements to either upside or downside. This higher fee is more likely to compensate liquidity providers for the greater price risk that they take on relative to stablecoin liquidity providers.

6. 1% fee tier: Best for exotic pairs The 1% fee tier is best suited for even less correlated token pairs such as the ETH-KNC token pair, which are subject to significant price movements to either upside or downside. This higher fee is more likely to compensate liquidity providers for the greater price risk that they take on relative to stablecoin liquidity providers.

Step 6: Authorize contract

If you haven’t already done so, you will need to need to authorize the KyberSwap smart contract to transact using your tokens on this network. Click the “Approve [Token]” button to do so. This will open the approval dialog window on your wallet.

Approve KNC

Step 7: Review pool creation

Click on the "Create" button to bring up the preview screen. Once you have reviewed the information on this screen, click on the "Create Pool" button to proceed.

Create pool preview

You will need to confirm this transaction in your wallet

KyberSwap pending confirmation from wallet

Metamask confirmation

Once you’ve confirmed the transaction you will see a screen informing you that the transaction has been submitted. You can click on “View Transaction” to view your transaction on the appropriate blockchain explorer.

Transaction submitted

Your new position should now be visible on the My Pools page on KyberSwap.

My Pools - Classic Pools