How to Provide Liquidity on Orca
Providing liquidity on a DEX helps facilitate on-chain trading and gives you opportunities to earn a yield on your tokens. This guide will show you exactly how to become a liquidity provider on Orca, Solana’s most user-friendly exchange.
It assumes you already have a funded SPL wallet. If you don’t, you can get that set up here.
- Go to Orca.so and select connect your wallet in the top right corner.
- Go to the Pools tab and decide which pool you want to deposit liquidity into.
When depositing into a liquidity pool, you need the same dollar amount of two different tokens.
In this case, let’s use $300 of USDC and an equivalent amount of SOL.
- Click Deposit and Approve the transaction in your wallet if the details are accurate.
Once the transaction is confirmed, a confirmation message will appear.
The SOL and USDC are no longer in this wallet but rather SOL/USDC LP tokens are.
To realize any gains or losses, these LP tokens need to be sold back to the protocol.
After only a few minutes, there will already be ORCA rewards ready to harvest.
To harvest them, you just need to click Harvest, then Approve the transaction in your wallet, and voilà – a yield has been earned.
Once you’ve harvested your rewards and you’re ready to withdraw your liquidity, simply select Withdraw and then Approve the transaction in your wallet if all the details are correct.
You’ve now successfully provided liquidity to a DEX and withdrawn your rewards, as well as your initial liquidity.
It’s important to be wary of all the factors affecting your yields such as price movements and impermanent loss. For a more detailed analysis of liquidity pools, read this.