In this guide we will explain how to provide liquidity to DeFi Kingdoms pools on the Harmony network to earn swap fees and JEWEL rewards.
What is Harmony?
Harmony is a blockchain built for openness and speed. Their mainnet runs Ethereum applications with 2-second transaction finality and 1000 times lower fees. Harmony is an open platform for assets, collectibles, identity, governance. Their secure bridges offer cross-chain asset transfers with Ethereum, Binance and 3 other chains.
What is DeFi Kingdoms?
DeFi Kingdoms is an exciting new project on Harmony that combines finance and gaming. It is a game, a DEX, a liquidity pool opportunity, a market of rare utility driven NFTs in the nostalgic form of fantasy pixel art.
What you will need to provide liquidity on DeFi Kingdoms on Harmony
- Metamask wallet
- ONE tokens in your wallet for gas
- Two ERC-20 tokens to provide as liquidity on Sushiswap
Setting up the Harmony network with your Metamask wallet
First, you will need to configure your Metamask wallet to connect to the Harmony network. You will need to open Metamask and click on the Network selection dropdown and then click on Custom RPC.
Here is the list of the network parameters so you can easily copy them:
- Network Name: Harmony
- New RPC URL: https://api.harmony.one
- Chain ID: 1666600000
- Symbol: ONE
- Block Explorer URL: https://explorer.harmony.one/#/
Fill out the empty fields as shown above and click on Save. You will be directly switched to Harmony’s Mainnet now in the network dropdown list. This process adds the Harmony network to the list of available networks you can switch to from within Metamask. Sometimes it is helpful to switch networks when Metamask is acting strange or if you are having trouble getting things to show up.
Move funds to Harmony network
You can use the “Harmony Horizon Bridge” to move tokens over to the Harmony network from Binance Smart Chain or Ethereum. You will need to connect your wallet to the network you are transferring your tokens from and then use the bridge to move them over to the Harmony network. One thing to note is that the Harmony network uses ONE as gas, so if you bridge over ONE tokens you will have what you need to make a transaction.
Create a character
In order to use DeFi Kingdoms, you will need to create a character to play the game and use the DEX. You will need to choose a character name and select an avatar and then you will be asked to sign a transaction. Once your character is created you will be able to navigate the world map pictured below.
Finding the right pool to provide liquidity
Navigate to the “Gardens” to view the rewards that are available for providing liquidity. The pools with the highest JEWEL rewards will be listed. You will need to speak to the “Druid” to pull up the menu of pools.
To acquire the tokens needed for the pool you would like to enter, you can go back to the world map and navigate to the marketplace. Speak to the “Trader” to open the DEX where you can swap tokens.
Steps to add liquidity to DeFi Kingdoms
Once you have equal amounts of the tokens you would like to deposit into the pool navigate back to the Garden and speak with the Druid. Using the “Gardens” menu you can select a token pair that you would like to provide liquidity to. Use the “ + Liquidity “ options to open the UI for entering a pool. Remember, you have to put an even proportion of each token into the pool (50/50) and you will typically have to approve each token before you can add liquidity. Luckily on the Harmony network this does not cost very much in gas.
Once you have added the liquidity, you will have Jewel Liquidity tokens (JEWEL-LP) in your wallet that you can manage from the DeFI Kingdom site and then proceed to stake those JEWEL-LP tokens to start earning rewards.
Stake your JEWEL-LP tokens to start earning JEWEL rewards
Once you have the JEWEL-LP tokens, you can then stake them to earn your JEWEL rewards by hitting the “DEPOSIT JEWEL-LP TOKENS” button. Once it is staked, you will start earning your JEWEL rewards!
How to withdraw liquidity and what to expect
Much like with Uniswap, when you withdraw your liquidity from the DeFi Kingdoms Harmony pools you will get back a different number of each token than when you started. That is due to the automatic rebalancing that is a core feature of automated market makers (AMM’s).
You are able to see this process in action when tracking your tokens on APY.Vision. APY.Vision provides real-time tracking that illustrates the impermanent loss or gain of a liquidity pool position as shown below.
To withdraw your JEWEL rewards from DeFi Kingdoms first be aware that there is a sliding fee for withdrawals based on how long you have been providing liquidity. The fee starts at 8% but after 5 days drops to down to 1%. You can see how the withdrawal fees work here.
Once you have withdrawn your rewards can navigate back to the Druid in the Marketplace and manage your pool position to exit the liquidity pool.
Click the remove button pictured above. to exit the liquidity pool and get your share of the two tokens you were using to provide liquidity.
Select 100% and click the “Remove button again to get your tokens back.
Providing liquidity is a great way to earn some income on tokens sitting in your wallet. You do have to be careful when providing liquidity, as sharp price increases or decreases can have a huge impact on the performance of your position. We suggest using APY.Vision to keep a close eye on your positions to know when to remove liquidity during times of extreme price volatility.
APY.Vision does not give investment advice and always insists that you do your own research. Read our full Legal Disclaimer.
Check out APY.Vision!
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