In this guide we will explain how to provide liquidity to Grim vaults on the Fantom network to earn swap fees and yield farming rewards that are auto-compounded.
What is Fantom?
Fantom is a high-performance, scalable, and secure smart-contract platform. It is designed to overcome the limitations of previous generation blockchain platforms. Fantom is permissionless, decentralized, and open-source. It uses a novel aBFT consensus mechanism called Lachesis which allows Fantom to be much faster and cheaper than older technologies, yet extremely secure.
What is Grim Finance?
Grim Finance is a Smart Yield Optimizer Platform that allows users to stake LP-Tokens issued from AMMs (Automated Market Makers) in Grim Vaults, which automatically harvest and re-stake their rewards as LP-Tokens for a compounding effect. Grim has over 340 different vaults on their platform that users can deposit into. For more information on how vaults work, check out this article we previously published “Everything You Need to Know About DeFi Vaults”.
What you will need to provide liquidity on Grim on Fantom
- Metamask wallet
- FTM tokens in your Fantom wallet for gas
- LP tokens, Stablecoins or any other assets Grim has a Vault for
Setting up the Fantom network with your Metamask wallet
Much like with the Polygon network, you can use Metamask to interact with Fantom. There is a web wallet you can use to monitor your balances. It was created as a Progressive Web App (PWA) to make it easier to launch on all major platforms.
To configure your MetaMask to have the ability to access the Fantom network you need to click the icon in the top right corner and select “Settings”. Once there, find the tab labeled “Networks” and when you arrive there you should see a button to “Add Network” where you can input the settings below:
Here is the list of the parameters so you can easily copy them:
- Network Name: Fantom Opera
- New RPC URL: https://rpcapi.fantom.network
- Chain ID: 250
- Currency symbol: FTM
- Block explorer URL: https://ftmscan.com
This process adds the Fantom 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 from ETH or Polygon/Matic networks to the Fantom chain
Key takeaway: Moving stablecoins to Fantom is cheap and easy, moving FTM is a bit more difficult. You can get a small amount of FTM if you have none from an FTM faucet.
A website called Fantom Community Alerts has set up a faucet to distribute FTM tokens to new users of the platform so they have enough FTM to make their first trade. You can find it in the section of their page with the label “FTM Faucet”. This is helpful if you are only using the stablecoin bridge mentioned below and have no FTM in your wallet to make the first transaction.
To move funds from ETH mainnet to the Fantom network, you must first own some FTM tokens on Ethereum, you can purchase them on Uniswap or Sushiswap. You can then use a service called Multichain.xyz to swap the FTM to the Fantom chain by selecting FTM (ETH) and FTM (Fantom) in the interface and performing the swap. Be aware that this method has Minimum and maximum amounts for swap sizes and fees. The minimum fee is 80 FTM so be sure that you are swapping enough tokens to make it worth the 80 FTM.
Using a service called xPollinate (which is powered by Connext and 1Hive) you can easily move stablecoins like DAI, USDT and USDC from the Matic chain to the Fantom chain. They currently support moving stablecoin funds back and forth between xDAI, Polygon, Fantom and Binance Smart Chain. This service is dependent on the availability of exit liquidity for each of the chains, which they display below the main swap interface. At the time of writing, there was plenty of exit liquidity for most of the chains except Polygon/Matic.
Finding the right Vault to provide liquidity to on Grim
Grim 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. They support a couple dozen different types of AMM LP tokens with the main one being Spiritswap. 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.
Steps to add liquidity to Grim 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 SpirtSwap. For this example we have chosen the TOMB-FTM LP vault.
Step 2: For this vault, you will first need to go to Spiritswap and add liquidity to the TOMB-FTM pair to get the LP tokens you need for this vault. You do NOT need to stake those LP tokens on Spiritswap as Grim will be doing that for you.
Step 3: Click the “Approve” button and then you will get an option to “Deposit” as pictured below. I usually use the “Deposit All” button to make sure there is no dust left in the wallet after. Hit either button and you will start auto-compounding!
Once the deposit goes through you will see the balance reflected on the “Withdraw” side of the UI.
How to withdraw liquidity and what to expect
One important thing to note is that different vaults have different fees associated with deposits and withdrawals. In the picture above you can see that this vault has no deposit fee but there is a 0.1% withdrawal fee.
When you are ready to pull your liquidity from the vault, simply hit one of the “withdraw” buttons 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.
Check out APY.Vision!
APY.Vision is an advanced analytics tool for liquidity pool providers and yield farmers. If you’re using any DEXs, AMMs, or liquidity pools this is the tool you will need to easily track the ROI of your liquidity provider and yield farming activities. Try it now!