Balancer is an automated portfolio manager and AMM (automated market maker) trading platform that allows users to efficiently trade tokens through the use of their widely used liquidity pools at low gas fees. Also, Balancer provides an extendible and programmable pool architecture atop which any conceivable pool type with custom curves, parameters and logics can be created.
Lido users can provide wstETH (wrapped stETH) as liquidity to the respective pool to earn trading fees and additional incentives while still earning the staking rewards.
Head over to Balancer.
Choose the network. Balancer now supports a number of chains like Ethereum, Arbitrum, Polygon and Gnosis Chain.
Choose the token pair or pool. When you filter by wstETH, you can see a list of wstETH-related pools. As seen, the wstETH/ETH ComposableStable pool is the most popular one for Lido users with the largest TVL and trading volume.
Choose the amount of tokens to add. After clicking ‘Add liquidity’ on the pool page, Enter the token amount. You can LP a single token or both.
Preview the liquidity info. The preview page shows you the liquidity info, such as the amount of LP token you are expected to receive.
Approve and Confirm. After the transaction is confirmed, you can see the pool LP token in your wallet or check your position in the Portfolio page.
Users are incentivised to be liquidity providers in exchange for swap fees and additional rewards. Swap fees and Lido staking rewards automatically go to LP’ers. For other incentives, LP’ers have to stake LP tokens on the pool page. To boost the rewards, Balancer encourages users to get veBAL by locking BAL/WETH LP tokens. Then, LP’ers can claim the incentives at any time on the Claim page.