In this guide we will explain how to provide liquidity to KogeFarm vaults on the Polygon network to earn swap fees and yield farming rewards that are auto-compounded.
What is Polygon?
Polygon is a scaling solution for Ethereum with fast and cheap transactions. It is a seperate blockchain with different features and parameters which requires moving funds across a “bridge” to get on the Polygon network. The Polygon network uses different technologies than Ethereum Layer 1 so it has a different security model and is able to have lower transaction costs.
What is KogeFarm.io ?
The KogeFarm.io platform brings together hundreds of yield farming opportunities in one place and automates away the hassle of manually harvesting reward tokens. It is a low-fee, multi-chain yield aggregator/optimizer that automates reward harvesting and yield compounding across hundreds of farms from dozens of yield farm platforms. It was launched in May 2021 on the Polygon chain and is expanding to others.
Once a user deposits funds into a vault, KogeFarm begins automatically harvesting rewards for you. It’s able to amplify yield by not only harvesting reward tokens but also using that reward token to add liquidity to the underlying liquidity pool thus increasing the stake in the farm.
What you will need to provide liquidity on Kogefarm
- Metamask wallet
- MATIC tokens in your Polygon wallet for gas
- LP Tokens to deposit into the vaults (or tokens you can use to swap into the tokens needed for a given vault
Setting up the Polygon network with your Metamask wallet
First, you will need to configure your Metamask wallet to connect to the MATIC network. You will need to open Metamask and click on the Network selection dropdown and then click on Custom RPC.
Fill out the empty fields as shown in the picture above and click on Save. You will be directly switched to Matic’s Mainnet now in the network dropdown list. This process adds the MATIC 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.
Here is the list of the parameters so you can easily copy them:
- Network Name: Polygon Mainnet
- New RPC URL: https://polygon-rpc.com/
- Chain ID: 137
- Currency symbol: MATIC
- Block explorer URL: https://polygonscan.com/
Move funds from ETH network to Polygon/Matic network
The Polygon Wallet interface has a section labeled “Bridge” and it will bring you to the interface pictured above. Once you have moved funds over to the Polygon networks you can manage them from the same Polygon Web Wallet interface .
Finding the right Vault to provide liquidity to on KogeFarm
KogeFarm has a variety of options on their platform ranging from vaults that require LP tokens from an AMM to deposit to single asset vaults that only require depositing one type of token. You can use the filters at the top of the page to narrow your selection by a few different criteria like which AMM platform the LP tokens are from or which types of assets you are looking to stake. There is also an option to sort by APY to find the best performing vaults.
Platforms: ApeSwap, CafeSwap, Curve, DinoSwap, Dfyn, Gravity, Iron Finance, JetSwap, KogeFarm, PolyCrystal, PolyPup, PolyQuity, Polyroll, PolyShield, Polyvertex, Qi Dao QuickSwap, SushiSwap, Swamp
Vault types for filtering: Single Asset, Stable LP’s, No Deposit Fee, Newly Added
You can check which individual vaults are supported by APY.vision here.
Steps to add liquidity to KogeFarm vaults
Step 1: Identify which vault you would like to deposit to and make sure you have either the single token or LP tokens needed to deposit. For more info on how to add liquidity to AMM’s to get the LP tokens, you can check out this article that offers a guide on supplying liquidity to QuickSwap. For this example we have chosen the MAI-USDT LP vault. You will have to make a transaction to ‘Enable vault” before you will be presented with the option to deposit.
If you do not have the LP token, you can use the “Get MAI-USDT LP” link highlighted above to swap into the tokens needed for this vault. Once you have the 50/50 proportion of both tokens you can then use the “Add Liquidity” link to deposit the tokens into the AMM (Quickswap in this example) liquidity pool to get the LP tokens needed. The process for adding liquidity can vary from protocol to protocol, check our blog archives for guides on how to use many of them.
Step 2: For this vault, you will first need to go to QuickSwap and add liquidity to the USDT-MAI pair to get the LP tokens you need for this vault. You do NOT need to stake those LP tokens on QuickSwap as KogeFarm will be doing that for you. Click on the “Pools” section of Quickswap to find the picture below to make sure you have entered the liquidity pool.
Step 3: Once you have the QuickSwap LP tokens needed in your wallet, Click the “Deposit” button as pictured below.
Clicking the Deposit button will bring you to the input box where you can enter the amount of LP tokens you would like to stake in the vault as pictured below.
Once you have deposited the LP token into the vault, you will see the amount of LP tokens you have staked reflected in the interface as pictured below. It will also display the Daily Return if staked and the return APR of the underlying farm.
Tracking Your Position on APY.vision
First time APY.vision users – enter your Polygon address in the box highlighted above. On mobile/tablets click on the search icon and copy their address into the popup
Once your vault position is deposited and auto-compounding on Kogefarm, you can start tracking the performance of the vault. APY.vision will separate the liquidity pool activity from the vault activity (the auto compounding) as shown below.
How to withdraw and what to expect
KogeFarm has a simple fee structure with the lowest fees available ranging from 0-2.9% performance fees with zero deposit/withdrawal fees. That means you will pay a fee based on your profit from your vault, but no other fees.
When you are ready to pull your liquidity from the vault, enter the amount you wish to withdraw and hit the “withdraw” button and your LP tokens will be back in your wallet. To exit the liquidity pool entirely, you will have to go back to the AMM where you entered into the pool to get your tokens back. Note you only need to do this if you are in a vault using LP tokens, a single asset vault will not require these extra steps.
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. To read more about the risks, we highly recommend reading this post. 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.
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