How to create a liquidity pool for your fungible token

A step-by-step guide on how to list and set liquidity for your fungible token.

Disclosure and Disclaimer: The following content is for educational purposes only. It is not financial advice or legal advice.

Prerequisites

To follow this tutorial you must have completed the following:

Created and verified your account on VORJ. If you have not completed this please follow this tutorial How to create an account on VORJ.
Created an organization and a project. If you have not completed this step please follow this tutorial Create an organization and project space.
Created, deployed and minted a fungible token. If you have not completed this step please follow this tutorial Create, deploy & mint a fungible token.
You will need a wallet that you have control over and you will also need some VET and VTHO.

If you don't already have a vechain compatible wallet create one using VeWorld or Sync2 which are browser compatible and have mobile support.

To continue this tutorial you need to have deployed a fungible token (ERC-20) on mainnet. If you followed the previous tutorials you likely deployed a fungible token on testnet. Repeat the tutorials creating a project and fungible token on mainnet.

Objective of this tutorial

The objective of this tutorial is to provide a simple step-by-step guide on how a user can create a liquidity pool for their fungible token.

What is a liquidity pool and how does it work?

A liquidity pool is created when a user deposits a pair of fungible tokens into a smart contract. These smart contracts are then used to provide liquidity to platforms that provide services such as, token swaps on decentralized exchanges (DEX) or decentralized finance (DeFi) protocols. In return for providing liquidity, users expect to earn a percentage of transaction fees.

To start we need to login to VORJ. Once you have successfully logged in you can navigate to a mainnet project that you created earlier which contains a fungible token which has been deployed to mainnet. If you do not have a mainnet project or have not created and deployed a fungible token on mainnet follow the previous tutorials, Create an organization and project space and Create, deploy & mint a fungible token making sure to create your project using the mainnet network.

You should be see a screen similar to the one below. This particular fungible token contract has been deployed to mainnet and has a total supply of 1,000,000 tokens with zero tokens minted.

2. Mint tokens into your wallet

In order to create a liquidity pool for our newly created fungible token we first need to own and control some of the tokens. To do this we will need to mint some tokens into a wallet address that we own and control.

a. Get your wallet public address

I will be using the VeWorld desktop wallet for the rest of this tutorial. The Sync2 wallet has a similar interface and capability so if you are using that wallet you should be able to follow along.

In the image below you will see an image showing a VeWorld wallet. To get the public address of your wallet use the copy icon, . This will copy the public address of your wallet into your clipboard.

b. Mint tokens into your wallet

Now with your wallet public address in your clipboard navigate back back to VORJ and your mainnet fungible token actions page. What you see on screen should be similar to the image below.

I am going to mint half of the max supply of this particular fungible token contract, 500,000 tokens, into a wallet that I control. Paste the previously copied public address of your wallet into the address input field and type an amount into the amount field. Verify the information in the fields and when you are satisfied press the Mint button.

c. Add the fungible token contract to your wallet

This step is required if your token is not present on the official token registry. If your token is on the official token registry then skip this step to Step 3. To add your token to the official token registry, follow this guide How to list your fungible token on the official token registry.

We need to manually add our fungible token contract to our VeWorld wallet. In order to do this please follow this guide How to manually add your token in the VeWorld wallet.

3. Create a liquidity pool

At this stage you should have a VeWorld wallet with some amount of your fungible token and some amount of VET and VTHO.

There are two decentralized finance (DeFi) protocols that you can add liquidity to VeRocket and Vexchange. Given that both have similar interfaces I will provide a tutorial just one, VeRocket.

Further custom steps will be added for now you can follow the VeRocket guide on how to create a liquidity pool https://help-center.verocket.com/guides/provide-liquidity.