In this article lets look at various ways to attract liquidity providers to invest in your token on decentralized exchanges like UniSwap, PanCakeSwap, SushiSwap etc. We know how important it is to get more support for your blockchain project to make it big. More LPs mean more people believe in your project. It means more users are making money from your crytpocurrency token. It also provides the much required liquidity for various crypto pairs for your custom created coin.
Gamify on-chain Transactions
When thinking from an investors point of view, your crypto token needs to show up on charts that liquidity providers look up to. Majority of the liquidity providers rely on technical charts to decide on which token to invest in. These charts show the best token pairs to choose based on on-chain transactions. There are many liquidity pool recommendation platforms that provide these real-time charts ex: DexTools, AstroTools, Zapper etc. Also every exchange has an analytics page that shows hot, upcoming token pairs, LPs etc.
Until your coin gains traction, spend quality time ( and some gas fees ) to regularly make some on-chain transactions for your token-crypto pair. More the number of transactions, more your token shows up on these charts across all platforms. Each of these analytics platforms have millions of investors visiting round the clock. More transactions also helps to boost your cryptocurrency tokens market cap.
Increase your Tokens Annual Percentage Yield (APY)
Liquidity providers love tokens that provide good APY. Infact well informed LP’s would first check DeFi analytics platforms like Dappradar, APY Vision etc. before deciding to choose which Crypto coin pair to provide liquidity to. In simple words ‘Annual Percentage Yield’ is the trading volume divided by liquidity. Which means that pools with less liquidity and more trading volume will have more APY. And if your token is relatively a new token in the market, you can quickly show high APY. You need to position your cryptocurrency token in a way that investors eye your pool as a fast growing pool to get into and harvest as much reward as possible. To achieve this, you need to have atleast 10 liquidity providers and regularly do transactions as much as possible. This sends out a signal that there are only a limited number of liquidity providers for this new fast growing pool that share a major chunk of the rewards. Since all this is on-chain, this shows up on all famous analytics tools thus getting you free marketing in front of millions of users of those platforms.
It works best if you have a proper plan that keeps growing over a period of time. On-board liquidity providers day by day and also increase transactions day by day based on the budget you can afford. While doing all this you also need to have a clear balance to show that your Crypto token pair not just too risky.
Position your Token’s Market Cap properly
Under which category of market cap does your token fall? ( Low, Mid or high market cap ). Crypto token investors and liquidity providers are specific on what level they like to play with. High risk investors choose low cap tokens. As low market cap tokens provide good constant volatility everyday. Its good for planning daily trade and profits. Mid cap tokens also gives enough volatility while also being less risky. High market cap tokens like Ether, Bitcoin etc. fluctuate less and has minimal risk as well. Liquidity providers lookout for tokens in the category they are comfortable with while also that has good trading volume. Being a token owner, you need to focus on positioning your token in the appropriate market capitalization level. There are certain things that can be done to maintain your token at the desired market cap. You can checkout such activities HERE.
To be Continued …..
Note: The activities discussed here can be applied to any DEX like 1inch, Compound, Curve Finance, MDEX, AnySwap, QuickSwap, HoneySwap, ShibaSwap, Bancor, JustSwap, BabySwap, JulSwap, SpiritSwap, WanSwap, ComethSwap, SwipeSwap, TerraSwap, MooniSwap, Polyzap, TronTrade, PlasmaSwap, SashimiSwap, LinkSwap, BepSwap, Bakeryswap, WaultSwap, ApeSwap, ParaSwap, SpookySwap, ViperSwap, DeFiSwap, SecretSwap, ZilSwap, KuSwap, Swapr, UbeSwap, Luaswap, vSwap, PinkSwap, LevinSwap, SakeSwap, PantherSwap, SerumSwap, BurgerSwap, Dodo, Synthetix etc.