We started a Poolfish YouTube Channel! Check out the video below where we explain how to use the Poolfish Pools explorer to find opportunities. 👇

If you want to learn more on how to make money while providing liquidity, check out our Learn liquidity providing video course.

Today, we're going to brave the exciting world of liquidity providing. We'll do this using the Poolfish website's pool page as your guide. Whether you're a seasoned veteran or just dipping your toes in the pool (pun intended), this step-by-step rundown will help you leverage the Poolfish platform to maximize your yields.

Understanding Pools and Liquidity Providing

First things first: what are pools and liquidity providing? Simply put, a pool is a mix of two different tokens, such as ETH and USDC. More adventurous ones might feature exotic combinations like FRA and USDC.

As a liquidity provider, your job is to contribute an equal amount of both tokens to the pool. This allows for easy swapping between tokens. The best part? Each swap transaction earns you fees.

Exploring the Poolfish Pool Page

Now that we've covered the basics, let's dive into the Poolfish pool page. Checkout our YouTube video that covers it in depth. This handy area gives you an overview of various decentralized exchanges (dexes). These are the places where swappers swap and you can provide liquidity.

One of the best features here are the filters. You can select specific dexes, chains like Arbitrum, or even different risk levels according to the fee tier system. Remember, higher fees typically mean more volatile tokens (more risk), while lower fees are found with stablecoins or blue-chip tokens (less risk).

Utilizing Data Points for Decision Making

Poolfish's pool page isn't just a pretty interface. There are several columns that provide you with insights to decide the best pools for you. Here's what each column represents:

1 - APY (Annual Percentage Yield): Indicates possible yield based on past data. You can set this to view APY over a 30-day or 7-day period. Just keep in mind, historical data isn't a guarantee of future returns.

2 - Price Volatility: Shows the pool's volatility over a specific duration.

3 - TVL (Total Value Locked): Represents the total value of liquidity locked in a pool.

4 - Fees: Amount of fees distributed to liquidity providers. Pools with higher fees may offer higher rewards... and risks.

5 - Volume: Reflects the total value of swaps executed within a pool.

6 - Volume to TVL Percentage: The ratio of volume to TVL or, in simpler terms, how much you receive in proportion to the liquidity you provide.

Strategies for Finding Lucrative Opportunities

Having understood the pool page and data points, here are few strategies to get you started in finding profitable opportunities:

Filter by High APY: Start with these to identify high-yield opportunities but remember these usually come with a higher risk.

Consider Risk Appetite: Adjust according to your risk level.

Research Tokens: Do this before jumping in. Choose tokens you are familiar with and believe in.

Leverage Fee Filters: Seek out pools with higher fees to potentially increase your earnings.

Explore Different DEXes and Chains: Test out different dexes and chains for lower gas fees or specific features you prefer.

Analyze Volume-to-TVL Percentage: Higher percentages can indicate potentially higher share of fees.

These strategies aren't exhaustive, and you can certainly develop your own based on your individual investment goals.

Conclusion

Poolfish's pool page is a fantastic resource for anyone looking to dip their toes into liquidity providing. It offers a myriad of filters to navigate, important data points to consider, and strategies for effective yield generation. Just remember, always do your due diligence, evaluate your risk tolerance, and stay informed about current market conditions.

Remember, though liquidity providing can be a profitable venture, it should be approached with diligent research and careful consideration.