Tutorial: How to create an automated liquidity pool with 1inch.exchange and Balancer in one transaction?
A regular user can create a liquidity pool on 1inch with the Balancer protocol in just a click, configuring its size and the weight of each currency.
One way to earn an income in the crypto space is by creating and running a liquidity pool — a pool of tokens locked on a smart contract. Users provide liquidity to a pool, which is used for exchange transactions.
Traders pay fees for each exchange transaction, and funds collected in this way are distributed between those who provided liquidity to the pool, while the pool owner also takes a share.
We suggest that for liquidity pool creation on 1inch, you use the Balancer protocol — a non-custodial portfolio manager, liquidity provider and price sensor.
To learn an easy way of creating a liquidity pool, follow this step-by-step guide.
(1) Choose the protocol. We’ll go for the Balancer protocol.
(2) Set a swap fee for your liquidity pool. The value range is from 0.0001% to 10%. But keep in mind that a lower fee allows traders to make more swaps using your pool.
(3) Configure the pool with tokens supported by 1inch.exchange (or request support for a new token in our Telegram group). Enter provided amounts, making sure that you have a sufficient balance. Token weights, which are the shares of various tokens in your pool, will be calculated automatically.
(4) Add up to 8 tokens to your pool. Just click the “Add token” button for each of them.
(5) Specify a value in USD that you want to provide as an initial liquidity amount.
(6) Fix the USD equivalent.
(7) Edit the weights of each token.
(8) Unlock tokens: allow the smart contract to take your tokens. Click the “UNLOCK” button for a specific amount of tokens or “INFINITY UNLOCK” for unlimited pool creations with these tokens.
(9) Now when all tokens, amounts and weights have been set, just click the “Create Pool” button and confirm the action in the MetaMask popup window.
You have been able to see how straightforward the process of creating a liquidity pool with 1inch and the Balancer protocol is. Now go ahead and try it out!