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How Binance Liquid Swap works, make money by providing liquidity

2 min read

With Binance Liquid Swap, it is possible to immediately trade tokens from pools and earn rewards.

Binance Liquid Swap has low commissions with reduced spreads and allows users to easily add tokens to the pool to become a market maker and earn interest and a share of transaction fees. Swaps are especially useful for stablecoins, in part because prices are more stable and fees are lower, especially for large transactions.

The Binance Liquid Swap is based on a liquidity pool: there are two tokens in each pool and the relative amount of these two tokens determines the price. Exchanges can take place if there are tokens in the pool.

While it may sound complicated, it’s actually quite simple, because everything is done by Binance: users only have to provide liquidity or exchange their tokens in pools. In addition, when providing liquidity, Binance pays interest and a share of commissions for transactions that take place in the pool.

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Binance Liquid Swap – Guide

There are two “Add” and “Redeem” tabs on the Binance Liquid Swap page.

The “Add” tab allows you to easily and quickly add liquidity by selecting the token you want to insert and the pool into which to insert it. In contrast, the “Redeem” tab allows users to redeem tokens from pools by selecting one of the pools in which you have previously inserted tokens and the token you wish to redeem.

binance liquid swap

Providing pool liquidity can generate revenue because stacked tokens receive a portion of commissions from pool transactions and the user is accrued flexible interest from savings. However, if the price of the token fluctuates significantly, the holders of the pool may not achieve the expected profit, so this carries a risk and there is no guarantee of the capital invested.

On the swap page, simply add the tokens to be exchanged and select the ones to be accepted.

How Binance Liquid Swap works, make money by providing liquidity

Binance Liquid Swap is an easy-to-use product as a gateway to understanding how decentralized finance (DeFi) works.

All content in this article is for informational purposes only and in no way serves as investment advice. Investing in cryptocurrencies, commodities and stocks is very risky and can lead to capital losses.
BlackRock (IBIT), the Grayscale Bitcoin Trust (GBTC), Fidelity (FBTC), Ark Invest/21Shares (ARKB), Bitwise (BITB), Franklin (EZBC), Invesco/Galaxy (BTCO), VanEck (HODL), Valkyrie (BRRR), WisdomTree (BTCW), Hashdex (DEFI)

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