How to get a yield farm with Verse DEX

Anyone can earn rewards by depositing specific digital assets into specific decentralized applications (DApps). Known as yield farming, it is a way for enterprising people to maximize their returns from their crypto holdings.

This article demonstrates yield farming using Bitcoin.com’s decentralized exchange, Verse DEX, which currently offers up to 14% APY for this strategy.

• For basic instructions on how to use the Verse DEX (how to connect your wallet, etc.), see this guide.

Crypto projects offer yield farming rewards to borrow crypto assets from people. Typically, projects use borrowed assets to increase liquidity, but there are other use cases such as staking. High liquidity is one of the most important characteristics of any financial market as it enables fast and efficient financial transactions. For a detailed introduction to liquidity, see this article.

Yield farming is a good strategy to increase liquidity. New projects can boost their liquidity and established projects with declining liquidity can reverse the trend with generous incentives.

This article focuses on yield farming by providing liquidity through Verse Farms.

Verse Farms are a collection of smart contracts on Bitcoin.com’s Verse DEX decentralized exchange where liquidity providers (LPs) can deposit LP tokens to earn rewards. Farm Rewards are paid on top of the trading fees you are already earning by providing liquidity. Verse Farm rewards come from the Verse Ecosystem Incentives program. Specifically, 35% of the Verse token supply will be used for rewards distributed via yield farming, staking, airdrops, and other mechanisms.

It is a two step process to yield farm on Verse DEX.

1. Get Liquidity Pool Tokens (LP).

2. Deposit these LP tokens on a farm.

Don’t worry if you’re unfamiliar with the terms “pool” or “LP token”. They are simple concepts and are explained in the following section.

Verse DEX runs on the Ethereum blockchain. The Bitcoin.com wallet app supports DApps on multiple chains, including the Ethereum blockchain via WalletConnect.

key terms

Pool: Each DEX trading pair has its own liquidity pool. These are called “pools” or sometimes “liquidity pools”. For example, the popular VERSE-WETH trading pair on the Bitcoin.com Verse DEX has a large liquidity pool that is half VERSE and half WETH (wrapped ETH). Liquidity providers for DEX pools earn a proportionate share of the total volume of assets exchanged by people trading between the assets in the pool. In the case of Verse DEX, liquidity provider earnings are displayed as a dynamic APY in the Pools section.

LP Token: When you deposit cryptocurrencies into a liquidity pool, the smart contract creates a token and sends you a token, a kind of receipt. This token, known as a Liquidity Pool (LP) token – sometimes called a liquidity provider token – is used to realize pending rewards from your position and withdraw your deposited cryptoassets.

APY: APY stands for Annual Percentage Return. This is a method of calculating the interest earned on an investment that takes into account the effects of compound interest. For a detailed look at APY read the article What is APY?

As mentioned above, yield farming with Verse Farms is a two-step process:

1. Receive Liquidity Pool Tokens (LP) on Verse DEX.

2. Deposit these LP tokens into a farm on Verse DEX.

Step 1: Get Liquidity Pool Tokens (LP) on Verse DEX

You get LP tokens by providing liquidity to the Verse DEX. You receive a return in the form of the fees paid by people trading the pair.

Before providing liquidity, you need to review which pools Verse Farms supports. You can see the current Verse Farms by going to https://verse.bitcoin.com/farms. As you can see, each farm displays its current APY:

Once you have decided on a farm, for example “VERSE/ETH”, you need to deposit VERSE and ETH into the VERSE/ETH liquidity pool. This is done from the Pools page:

If you don’t have one or both cryptocurrencies for the pool you’re contributing to, you can use the Bitcoin.com Wallet app to buy or trade in seconds.

Here is how you can deposit into a liquidity pool on Verse DEX:

1. On the Pools tab, select the pool you want to add liquidity to and click Deposit.

2. Enter the amount you wish to deposit. You can choose between manually depositing equal amounts into both pool assets, or depositing just one of the two pool assets. To choose between these two modes, select either “Standard Assets” or “Single Asset”:

   If you choose Single Asset, Verse DEX will automatically convert half of that token into the other token in the pair and then deposit both into the pool. Read more about this feature here.

3. When you are ready, click on the “Confirm Deposit” button.

4. Confirm the transaction and you’re done! You receive Liquidity Pool (LP) tokens (e.g. VERSE-X (VERSE/ETH)) in your wallet. These LP tokens are like a receipt for your deposit; they represent your partial ownership of the liquidity pool. You can later redeem these LP tokens for the underlying assets (e.g. VERSE and ETH) in the pool plus your rewards. You can track your rewards in the Pools tab and withdraw your Liquidity + Rewards at any time.

This video shows the process of depositing into liquidity pools on Verse DEX:

Step 2: Deposit LP tokens in a farm on Verse DEX

Once you have the LP tokens that will be accepted in a farm, all you have to do is deposit the LP tokens in the appropriate farm:

This video shows the process of depositing LP tokens into Verse Farms to get farming rewards:

You can either withdraw your LP tokens and claim rewards at the same time, or you can leave your LP tokens on the farm and claim rewards.

Simultaneously withdraw and claim rewards

1. Connect the same wallet to Verse DEX as above.

3. Select “Withdraw farm deposit”.

4. Enter MAX as the amount to be withdrawn and click “Confirm Withdrawal”.

5. Follow the approval requests in your wallet. You’re done!

This video shows how to withdraw your LP tokens and claim rewards at the same time:

1. Connect the same wallet to Verse DEX as above.

3. Click Claim Rewards and follow the on-screen instructions to complete your claim.

1. Connect the same wallet to the Verse DEX as above.

3. Click “Withdraw” and then enter the amount of LP tokens you wish to withdraw. If you withdraw the full amount, you will automatically receive any unclaimed bonuses.

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