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On Soroswap Finance, liquidity management is facilitated through liquidity pools managed by an Automated Market Maker (AMM). This automated approach allows for efficient and continuous asset conversion without the need for a traditional order book. Here’s an overview of how to interact with liquidity pools on Soroswap and get started.

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What is a Liquidity Pool?

Liquidity pools on Soroswap enable users to deposit and withdraw assets efficiently. Automated Market Makers (AMMs) manage these pools using mathematical formulas to set asset prices and ensure constant liquidity. For a detailed explanation of liquidity pools, refer to the Definition of Liquidity Pools.

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Getting Started with Soroswap Finance

To start using Soroswap Finance, follow these essential steps: 1. Set Up Your Wallet
  • Install Freighter Wallet: Download and install the Freighter browser extension from Freighter Wallet.
  • Set Up Your Account: Create a keypair or import an existing account using a mnemonic phrase. Then, switch to the Testnet from the network dropdown in Freighter.
  • Get Test XLM: To cover transaction fees, use the Friendbot to fund your testnet account with 10,000 lumens. Just enter your Stellar public address to receive the funds. Check the guide for Soroswap testnet overviews.
2. Add and Manage Liquidity Adding and managing liquidity on Soroswap Finance involves the following steps:
  • Access the Add Liquidity Page: Go to the relevant section on Soroswap to manage liquidity. Check the guide for Adding Liquidity for detailed instructions.
  • Select Tokens: Choose the tokens you wish to add to the pool. Review the pool information before confirming the transaction.
  • Create a New Liquidity Pool: When adding liquidity, you may create a new pool. Provide an initial amount of each asset you wish to include. Here’s the key information:
    • Minting Tokens: The amount of tokens minted to represent your share in the pool.
    • Exchange Rate: The rate between the assets you are depositing into the pool.
    • Maximum Slippage: The tolerance for price deviation that can cause the transaction to revert if prices change more than 0.5%.
    • Pool Share: Your percentage of ownership in the pool after adding liquidity.
    • Network Fee: The fee associated with the transaction.
Once completed, review the details and submit the transaction. You can check the transaction status and hash on Stellar.Expert or StellarChain.io. 3. Remove Liquidity To adjust your participation or withdraw liquidity from a pool:
  • Access the Remove Liquidity Page: Navigate to the appropriate section on Soroswap to manage liquidity removal. Refer to the guide for Removing Liquidity for detailed instructions.
  • Select the Amount to Withdraw: Choose the amount of liquidity you wish to withdraw and review the related information before confirming.
  • Complete the Transaction: Follow the steps provided to withdraw the assets corresponding to your share in the pool.