Uniswap & Balancer: How To Swap Tokens and Add Liquidity

I’m sure many of you are wondering how to get started in trading out tokens and adding liquidity to pools. That’s why we’ve put together this quick step-by-step guide on how to start making your crypto dreams come true. 

If you have no idea what any of that means, make sure you check out our primer on DeFi yield farming first.

Before we let you in on how Uniswap and Balancer work, you’ll need to have your own crypto wallet. A good one to look into is MetaMask. This wallet allows for easy set-up and wide coverage and compatibility in terms of blockchains and tokens. Check out their site, and you’ll be able to download and set-up your wallet in no time.

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Table Of Contents

Uniswap

The first website to check out and study is Uniswap Info, where you can easily monitor how much liquidity is in Uniswap.

You can also check out the liquidity pairings and see how they’re currently performing. 

In the Top Pairs section, you can check which pair gives the best annual percentage yield by looking at the last column (1y Fees/Liquidity). It’s basically an estimate of how the pair might perform on an annual basis by analyzing the data from the past 24 hours. 

For now, a good performing pair would be LINK-ETH.

Let’s go to the Uniswap app and try to add some liquidity to the pair to gain some shares in the pool.

1. Connect your wallet

Click on Connect Wallet to get started.

2. Select a token

By clicking on Select a token, the app lets you choose which tokens you want to swap. If you’re having trouble finding the token you want, you can easily search for it with the search bar above the list.

In this guide, we’ve chosen to trade ETH for LINK.

3. Fill out the From row

With the idea that we want to trade some ETH for some LINK, input the corresponding number of ETH you want to trade on the From row. You’ll see how much LINK you’ll get, along with the fees you’ll be charged.

4. Select a pairing

Once you’ve got the sufficient amount of LINK, you need to add liquidity to a given pool, head on over to the Pool tab, and select a pairing that you want to add some liquidity too.

Uniswap will ask whether you want to create your own pair (Create a pair) or add existing ones (Add liquidity). Since ETH-LINK already exists, we’ll choose the latter this time. 

It will then show you a page similar to the Swap page and ask what token pair you want to add liquidity.

5. Select a token

Upon clicking on Select a token, another search bar will appear, asking what token you want for the pairing.

Let’s select LINK. Upon clicking it, the app shows real-time statistics regarding the prices and pool share for the pair we’ve chosen.

6. Fill out the Input row

Let’s try checking how much shares we’d have if we add 1 ETH and the amount of LINK.

Upon typing in the corresponding amount you want on the Input row, LINK’s same value appears below it. The number of shares you’ll get for adding liquidity to the pair will also show up beside both tokens’ real-time prices. 

7. Proceed with the transaction

If you’re satisfied with the numbers it’s asking for, as well as the shares you’ll get, then go ahead and proceed with the transaction.

Balancer

Now that we have the inner workings of Uniswap down let’s check out Balancer for a breath of fresh air.

1. Check out the different pairs

First, click on Pool Management on the top right of the page to see all the pairs you can add liquidity to.

2. Select a pair

Select a profitable looking pair. You’ll be redirected to a different page.

Here you’ll find more analytic insight into its activity over the previous months. We’re checking out BAL-WETH since its volume has been much higher than other pairs in the past 24 hours.

3. Go to Balancer’s Exchange app

If this pair has captured your liking, head over to Balancer’s Exchange app.

Upon clicking the link above, you’ll be greeted with Balancer’s swap functionality. There, you can choose to turn in your tokens for other tokens of the same value.

4. Connect your wallet

Connect your wallet here before you transact! Let’s check out how much BAL equals 1 ETH.

5. Add or remove liquidity

If you find the numbers sufficient, click on the Add Liquidity tab on the upper right to proceed to the Liquidity Pool functionality of Balancer.

This will lead you back to the Pool Management page. There, select which pool you want to add liquidity into. Upon selecting the right pair, you’ll be able to add or remove liquidity to your selected pair through the buttons on the upper right of the page.

That’s about it, folks! We hope this guide helps you on your journey into the world of cryptocurrencies. It’ll be especially useful if you get into DeFi yield farming.

Uniswap & Balancer Walkthrough Guide

If you’re still having trouble making it all work, check out our walkthrough to add liquidity to Uniswap.

Credit: Promethia Finance.

Frequently Asked Questions (FAQ)

There should be in-depth analysis involved as you check out the values move for certain currencies. Some good factors to look at would be liquidity (higher liquidity = better opportunities = lesser risk), trading volume, and popularity. 

USDT, EOS, and TRX pairs have shown great promise when it comes to trading volume. However, do note that values in crypto are very volatile. The values of certain pairings may be high one day and low the next.

You may want to look into Trezor One, Metamask, Ledger Nano S, Exodus, and Mist.