Deposit Liquidity
Learn how to provide liquidity by using Gamma's liquidity pools

1) Preparation

If you haven't already, make sure you download a proper web3 wallet like Metamask.
A crypto wallet & gateway to blockchain apps | MetaMask
Also, make sure that you have a significant amount of Ethereum in your wallet to cover the gas costs to provide liquidity. You will have several transactions, including purchasing the pair, approving each token in the pair to use on Gamma's dApp, depositing, and then eventually withdrawing. If these gas fees are too expensive, consider providing liquidity on an L2 network like Polygon. Use the link below to evaluate the current market gas costs.
Lastly, make sure you fundamentally understand liquidity pools and Uniswap V3's concentrated liquidity system. Even though Gamma is managing your position, it's still important to understand the basics. Here is some quick reading on the subject:
What Are Liquidity Pools in DeFi and How Do They Work? | Binance Academy
Binance Academy
Concentrated Liquidity: Uniswap V3 Overview
BowTied Island
Our first step in proving liquidity (LPing) is to acquire the tokens for the pair we want to provide liquidity for, but before that, we want to take a look at what pairs are available on Gamma.

2) Find a pool to provide liquidity

Head on over to Gamma's dApp at:
Gamma — The protocol for active liquidity management
There are many ways to access the site, but ultimately you will wind up on the dApp landing page. You'll want to click the "Provide Activity Liquidity" box (red) to take you to the dashboard of liquidity pools.
We finally arrive on the landing page seen below.
Lots of things are happening here. Don't get overwhelmed! It's pretty simple. We'll go through it piece by piece.
In the top-left-hand corner, are your navigation buttons. They take you to the different dApp features, which include LPing, staking, and analytics.
In the top-right-hand corner, you'll find network controls, a dark-mode/light-mode switch, and a link to connect your web3 wallet. If you're looking to LP on another network like Polygon or Optimism, switch networks now. For the guide here, we'll be staying on Ethereum.
On the top of the box with the liquidity pools, you'll find the "Protocol Stats" bar that tells you some basic statistics about the Gamma system.
Total Value Locked: Also known as TVL, this is the sum of all the funds providing liquidity in the Gamma system at the current time. At the time of this guide, there are $11.36 million dollars providing liquidity in Gamma. Total Fees Accrued: This is the cumulative sum of all the fees produced by providing liquidity in Gamma. Fee-Based APR: This is the total fees produced compared to the total value locked, extrapolated to a yearly projection at the given time. This value describes the performance of all the pools combined compared to the TVL. Protocol Fees APY: This is the total fees produced per GAMMA staked to a yearly projection at the given time. This value includes a projection for compounding GAMMA returns. This value describes the performance of staking GAMMA.
Finally, we have the liquidity pools. The top pool (xGAMMA) is a special staking section and can be ignored for this guide. Here you'll find all the options available to you for LPing.
The APR (or the projected return) on that WBTC-ETH pool is looking pretty good. It's also a very simple pair. So, we'll start with that in this guide. First, let's expand details on the pair.
Here, we can see a few more details, like the TVL in the pair, the fee tier, the deposit caps, and more. We'll come back to this once we have both WBTC and ETH.

3) Find the proper pair ratio

This is a critical and often overlooked step. Gamma uses something called "dual-sided" deposits. You're actually going to be depositing two separate tokens. As tempting as single-sided deposits are, they currently have some serious security issues.
As such, we'll need both tokens. But, how much of each? Well, it depends on how the pool is balanced at the given time. Ideally, the pool is close to 50-50, but that's not always the case. If you want to optimize your deposit, we're going to want to compare the ratio of the assets in Gamma's pools. There's a quick and easy way to do this.
It all starts with connecting to Gamma's dApp, which we'll have to wind up doing later anyways.
Use the "Connect Wallet" buttons (red boxes) to connect your web3 wallet. You'll be taken through some prompts to connect to the site.
In this example, we'll be using MetaMask. Click the wallet that works for you, and follow the prompts to complete your connection to the site.
Now that we are properly connecting, we can simulate a deposit into a liquidity pool to find the current ratio. Select the proper liquidity pool, and select"Vault Deposit" on the top menu bar.
A warning will appear reminding you that what you are doing is actually relatively advanced. Congratulations! You're starting to become a DeFi expert. Proceed with caution though.
This is one of the most important screens in LPing. It can be used to determine how much each token you can or need to make a deposit. Inputting a number automatically calculates the other number. "Max" will set the maximum amount of funds in your wallet.
Let's try seeing what ratios we get with one of each token.
OK. Now we know what ratios we are going to be depositing at. Remember, this is only a short-term guess. These numbers can change. But for every ETH, we'll need about 0.096 WBTC, and for every WBTC, we'll need about 10.38 ETH.
Is this pool's ratio 50-50? Let's find out. Let's keep that window open, but open another tab and head on over to Uniswap V3.
Uniswap Info
This is an excellent opportunity to evaluate the pair you're going to be depositing into. Uniswap's analytics should provide us with some basic information.
Type your tokens into the search bar. In this case, "WBTC" would find the pair fastest. Take care to remember the fee tier of the pool. It's on the Gamma pool under the details.
When searching, several pools may come up. We want to choose the corresponding fee tier highlighted in the red box.
Now we're at the analytics page for the WBTC-ETH 0.05% pool.
Information overload again! Let's break it down.
The first thing we see is the ratio of the pairs. They don't match up! That means the deposit on into the Gamma WBTC-ETH pool is not going to be 50-50.
In this example:
1 WBTC = 13.65 ETH, but Gamma allows a deposit of 1 WBTC to 10.38 ETH 1 ETH = 0.733 WBTC, but Gamma allows a deposit of 1 ETH to 0.963 WBTC.
At the time of this guide, 1 WBTC is approximately $39.250, while one ETH is $2.880.
Rounded out, that is approximately a 57-43 ratio to WBTC-ETH.
So you'll need more BTC than ETH. You'll want to make your purchase in those ratios to minimize the number of leftover tokens not put toward the liquidity pool.
While we here at Uniswap, we can evaluate some stats, and get the tokens to deposit into the pool.
You can see that there is a pretty good volume for the TVL in this pool. That probably helps explain the pretty good APR on the pool. No strategy can compensate for low volume and trading fee creation, against the well-invested pool.
Make sure you evaluate these graphs. They can often provide useful insights into the pairs.

4) Acquire the proper tokens

Now that we've evaluated all the analytics of the WBTC-ETH pair and we've connected to both Gamma's dApp and have Uniswap open and ready. we need to purchase any of the assets we don't have. On Uniswap V3, click the "Trade" button in the top-left corner.
By now, this should be pretty familiar to you. We'll go ahead and purchase some WBTC as a demonstration
Mission accomplished. Now we have both tokens needed for the pair. Let's get this done.

5) Begin the deposit process

Go back to the Gamma website and find the pair you intend to provide liquidity for.
Once confirmed, click the vault deposit option like you did before.
In the above case, WBTC is going to be our limiting factor. So we'll press the "MAX" button there and the corresponding amount of WETH will come up. It looks good, so we'll begin our deposit by clicking "NEXT". Now we've started, and it's time to approve permissions.

6) Approve permissions

The first permission is going to be to wrap your ethereum. This converts ETH to WETH. You can do this by yourself off the platform if you want, but it can also be done here. Choose the "Wrap ETH" button and follow the prompts to approve on your wallet.
Wrapping Ethereum is a pretty small gas cost. You'll also see a status indicator on the Gamma dApp showing that the transaction is in progress.
With that done, press the "Next" button to proceed to the next permission.
You'll now be prompted to approve one of the two tokens in the pair. In this example, we'll start with WBTC. Click "Approve WBTC" to continue.
You will once again be prompted by your wallet to approve the contract to access your funds. This is the first true interaction with Gamma contracts.
Once complete, approve the second token, in this case WETH.
After approving in your wallet, you will once again see this "Pending Transactions" status bar in the Gamma UI.
Click "Next" again once you are complete. Congratulations! You are ready to deposit.

7) Deposit

You know that you are ready to deposit when you see the deposit button on your user interface. Press "Deposit" to proceed. This will be the largest and most expensive transaction.
One more approval! This one is the big one because you are doing several transactions simultaneously.
Ahhhh I'm depositooooorrrrrriiiinnggggg!!!
Once completed, you'll be punted back to the home screen, but something will look very different.

8) Confirm UI information

Back on the dashboard, you can now see your LP position. Figures include the amount of LP tokens you have, the USD value, and more.

9) Confirm on Etherscan

Let's double-check the transaction on etherscan. You can look directly at your wallet by doing to, but let's take a shortcut through metamask.
Click on the last transaction in Metamask, and bring up the details
Click on "View on Block Explorer". You'll be taken to etherscan.
In this window, you'll see lots of information. The contract you interacted with (blue box). The transaction amounts (red box), and how the transaction process works. 0.08897468414300102 xWBTC-ETH05 are your LP tokens. The transaction was successful! You did it.

10) What's next?

Now that you have LP tokens. You can withdraw them to exit your position or interact with more advanced features like Liquidity Mining and more.
Copy link
On this page
1) Preparation
2) Find a pool to provide liquidity
3) Find the proper pair ratio
4) Acquire the proper tokens
5) Begin the deposit process
6) Approve permissions
7) Deposit
8) Confirm UI information
9) Confirm on Etherscan
10) What's next?