BBB has moved to BSC Network, and if you are new to BSC (BEP20). then, this article can help you earn more BBB coins other than blocking nodes on BigByteBlock. One way is to provide liquidity for the trading pair BBB/BNB on PancakeSwap. and earn BBB coins on every transaction.
What does it mean to Provide Liquidity?
In terms of cryptocurrencies, It is the ability of a coin to be easily converted into cash or other coins. It is thus easier to buy or sell cryptocurrencies in a liquid market. since buy and sell orders will be filled instantly. Liquidity providers also earn an incentive reward on every transaction and enjoy earning a passive income.
Liquidity can be provided for BBB/BNB pair. where a certain amount of BBB and BNB is added to the liquidity pool, and liquidity providers earn rewards according to their share of the pool. The information about liquidity providers for BBB/BNB pair can be found here.
Why is it important to Provide Liquidity?
It is a very important aspect of BSC as it allows the trades to happen. The following are the reasons why it becomes important for a coin to have sufficient liquidity:
- If there is no liquidity, the trades will not happen.
- Less liquidity means a huge price impact. To make a successful trade, slippage needs to be increased which results in loss of funds, and many a time, the trade does not execute.
These problems will not occur if there is sufficient liquidity. On the other hand, you can earn more BBB coins as well.
How to add Liquidity for BBB/BNB pair?
This is a very easy task. Kindly follow the steps explained below to get started:
- Go to pancakeswap.finance and then click on the liquidity option under the Trade section.
- Click on “Add Liquidity” and select BNB and BBB (or copy contract address: 0x195075035e0fe74989d30a90b66a4c837839d5b9) currencies.
- Enter the amount of BBB and BNB you want to lock. and then click on “Enable BBB“. Metamask notification will pop up, click on confirm to execute the transaction.
- After the transaction is confirmed on the blockchain, click on “supply“. and then click on “confirm supply“.
- Click on confirm to execute the transaction. You should have some BNB in your metamask wallet for transaction fees.
You have successfully provided liquidity. and you will earn BBB coins whenever BBB/BNB trade happens.
How does it work?
The centralized exchanges like CoinBase and Binance are based on the order book model. The trades happen only when the buyer and seller agree to a particular price. This causes the trades to delay, especially for a coin with a low trading volume. So, this problem was solved through decentralized finance where trades happen automatically using liquidity pools. Let’s see how they work without the need of buyer or seller.
A certain amount of BBB and BNB is added to the BBB/BNB pool, and whenever somebody wants to buy BBB coins, he gets them from the BBB/BNB pool. When BBB is purchased from the pool, the amount of BBB decreases, now to maintain the equilibrium of BBB and BNB in the pool, the price of BBB increases.
The same thing happens when somebody sells the BBB. He gets BNB from the BBB/BNB pool and to maintain equilibrium in the pool, the price of BBB decreases. That’s why the trades are instant in the decentralized finance world and there is no need for a buyer to negotiate a seller for price and vice-versa.
Liquidity providers get special tokens called LP Tokens, which help them to earn rewards according to their share in the pool. LP Tokens are formed as a result of locking BBB and BNB for providing liquidity. These LP tokens can be unlocked any time to get back BBB and BNB to your wallet. This is another way of earning BBB coins apart from blocking nodes. But, you must have BBB and BNB in your metamask/trust wallet.
Since a lot of people are new to BSC, providing liquidity is one of the best ways to make passive incomes. Considering BBB a gem, it becomes very important to have sufficient BBB coins in our bags before we skyrocket. So you might not want to miss any way to earn BBB coins. Let’s face it and have a discussion about liquidity in the comment section. To read more about BigByteBlock, kindly refer to BigByteBlock Blog.