Adding liquidity to Velar Protocol is a straightforward process that allows you to earn rewards while contributing to the platform's liquidity pools. This guide will walk you through the steps involved in setting up your wallet, transferring funds, and adding liquidity to a pool of your choice.

Step 1: Set Up Your Wallet 

• Choose a Compatible Wallet: To get started, you'll need a wallet that is compatible with Velar Protocol. We recommend using wallets like Xverse or Leather. Ensure that your wallet is set up and funded with the necessary cryptocurrencies.
  
  

• Connect Your Wallet: Visit the Velar Protocol website and look for the "Connect Wallet" button. Click on it and follow the prompts to connect your wallet to the platform.

Link to complete guide on setting up your wallet for Velar: How to set up your Wallet for Velar

Step 2: Transfer Funds to Your Wallet

Before adding liquidity, you must ensure that your wallet contains the required cryptocurrencies. For example, if you want to add liquidity to the STX-aeUSDC pool, you must have both STX and aeUSDC in your wallet. Additionally, ensure you have enough of the native blockchain token (e.g., STX for Stacks) to cover transaction fees.

Link to complete guide on bridging USDC on Ethereum to aeUSDC on Stacks blockchain: How to Bridge to aeUSDC

Step 3: Add Liquidity

• Navigate to the Liquidity Pool: Locate the "Liquidity" or "Pool" section on the Velar Protocol interface. This is where you'll find the various liquidity pools available on the platform.
  
  

• Select the Pool: Choose the liquidity pool you want to participate in. For example, let's say you want to add liquidity to the STX-aeUSDC pool.
  
  

• Add Funds: Enter the amount of each token you want to supply to the pool. Velar Protocol will automatically calculate the equivalent value of the other token based on the current pool ratio.

  
  

• Confirm Ratios: Double-check the ratio of tokens you're supplying to ensure it matches the pool's requirements.

  
  

• Approve the Transaction: You may need to approve the transaction if this is your first time interacting with the selected pool. This one-time action grants permission for the platform to access your tokens.
  
  

• Supply the Liquidity: After approving the transaction, you can proceed to supply the liquidity. Confirm the transaction details, including the amount of tokens you're supplying and the associated gas fee.

  
  

• Confirm the Transaction: Review the transaction details in your wallet and confirm the transaction. Your wallet will prompt you to approve the transaction and display the gas fee required.

  
  

• Receive Liquidity Provider (LP) Tokens: Once the transaction is successful, you will receive LP tokens representing your share of the pool. These tokens serve as proof of your liquidity contribution and can be used to stake or redeem your share of the pool in the future.

  
  

Step 4: Velar Farming (Staking LP Tokens)

Once you've provided liquidity, you can also stake your LP tokens to earn additional rewards with Velar Farming. To participate in Velar Farming (if available for that given pool), follow these steps:

• Navigate to the Farming Page: Click on the "Farm" tab on the Velar webapp to access the farming section of the platform.

• Stake Your LP Tokens: Choose the amount of LP tokens you want to stake and confirm the transaction. By staking your LP tokens, you can earn extra rewards based on the specific pool's incentive structure.

  
  

Step 5: Monitor Your Investment

It's important to monitor the performance of your liquidity provision regularly. Keep track of the accumulated fees, rewards, and any changes in the value of your staked LP tokens. Velar Protocol provides a user-friendly interface that displays your liquidity positions and earned rewards.

Step 6: Managing Your Liquidity

If you need to adjust your liquidity position, you can add more liquidity or withdraw your funds by partially or fully removing your stake from the liquidity pool. However, be aware of potential impermanent loss, which can occur when the price ratio of the tokens you provided changes significantly compared to when you added liquidity.

Safety and Security Tips

• Always double-check the URLs and ensure you are on the official Velar Protocol website to avoid phishing attempts.

• Never share your seed phrase or private keys with anyone. Velar Protocol will never ask for this information.

• Consider the transaction fees and potential impermanent loss before providing liquidity to a pool.

By following these steps and taking the necessary precautions, you can successfully add liquidity to Velar Protocol and earn rewards while supporting the platform's liquidity ecosystem. Remember to refer to the official Velar Protocol documentation for the most up-to-date and accurate instructions specific to their platform.