What is Serum Swap? How to Add liquidity on Serum Swap

What is Serum Swap?

Serum swap is an AMM built on Solana (Smart Contract Platform). It’s on-chain and non-custodial.

Like Uniswap on Ethereum, Serum Swap on Solana allows users to:

• Swap SPL Tokens quickly and easily.
• Contribute to liquidity pools and get commissions in the form of Fee Swap.

See also: What is Solana? Complete set of SOL . cryptocurrency

Gas Fee & Serum Fee

Solana-based AMM is very fast! Transactions on Serum Swap take about 1 second to settle. Also, the Gas Fee is very small, around $0.0002 per transaction.

Swap Fee is calculated at 0.30%, in which:

• 0.25% belongs to liquidity providers (LPs).
• 0.04% allocated to Buy & Burn SRM.
• 0.01% to the hoster GUI.

Pros & cons

Advantage

• Very fast and cheap: Serum Swap is built on Solana so it’s super fast. Transactions on Serum Swap take about 1 second to settle. Gas Fee is extremely small (Gas Fee is very small, around $0.00002 per transaction).
• Support for many different Coins & Tokens: Serum Swap supports more than 20 different Coins & Tokens, including the top liquid coins such as BTC, ETH, USDT, USDC.
• Add Liquidity earns transaction fees: Liquidity providers can add liquidity to the liquidity pairs they want and earn the transaction fees incurred from that Pool.

Limit

• Impermanent loss: When the price difference is much, if you withdraw Liquidity, you will suffer a lot of impermanent losses. For example, when the price increases or decreases 5 times, but you withdraw liquidity, you will lose 25.4%.

• Smart contract risk: Serum Swap’s smart contract has yet to be audited. You should consider the risks before using.

Serum Swap Airdrop (October 28, 2020 – November 25, 2020)

To celebrate the launch of the Serum Swap, 1,000,000 SRM will be used as an Airdrop for the participants of Add liquidity some Pool on the Serum.

Details are as follows:

• Total prize pool 1,000,000 SRM.
• Divide into 20 times Random => each time 50,000 SRM/Pool.
• Airdrops are not sent directly to the wallet, but will be sent to the pool. But depending on the liquidity ratio of the contributors/total value of that pool, whoever contributes a lot of liquidity in that pool gets a lot, whoever contributes less gets less.
• Start time: 2020-10-28, 1AM HKT.
• End time: 2020-11-25, 1AM HKT.
• Pools that support Airdrop:
  • SRM/BTC
  • SRM/ETH
  • SRM/USDT
  • SRM/USDC
  • SRM/SOL
  • SRM/YFI
  • SRM/LINK
  • SRM/SUSHI
  • SRM/FTT
  • SRM/FRONT

How to Add liquidity on Serum Swap

In this part, I will show you how to Add liquidity on Serum Swap (using Sollet.io)

Step 1: Create a SOL wallet & Load some SOL into the wallet

Go to Sollet.io, create a new wallet.

Note: Seed words should be stored carefully, preferably in a safe place. These phrases are extremely important, this is the only way for you to recover your wallet.

After saving, you should create an additional password for your Sollet.io wallet. Then select “Create Wallet” and you’re done.

Step 2: Deposit some SOL into the newly created wallet and add the Token you want to Add Liquidity on the Serum

Immediately after creating the wallet, click “Get” and the SOL address will appear. You just need to transfer some SOL to this address:

To add more Tokens to this wallet, click on the icon + in the right corner. Find and add the desired token then add it, this will take some SOL.

For example: If you want to Add liquidity on the Serum Swap as SRM/USDT, then add SRM with USDT to this wallet:

Step 3: Send the Token you want to Add liquidity to the address of the corresponding Tokens

After adding SRM and USDT, you send the SRMs into USDT to the respective addresses.

Note: The address of the SPL Token wallet (USDT, SRM) will be different from the sol wallet address, you should pay attention to this point.

Note, adding Liquidity on Serum Swap is similar to Uniswap, requiring 50% SRM and USDT.

You can buy on the floor first and transfer the corresponding volume or just transfer to Serum Swap USD, then Swap ½ of USDT volume to SRM on Serum Swap.

Step 4: Access Serum Swap and Add liquidity

Access swap.projectserum.com go to the Pool and proceed to Add liquidity.

summary

I have introduced you to an overview of Serum swap, as well as some of the advantages of Serum swap.

Serum Swap is having an Airdrop program for Add liquidity users on it, you can consider this. In my opinion, the reward is quite large, if you have idle capital, you can participate.

I’m Vinh and I’ll see you guys in the next posts!