Creating an LP token

Several sites (for instance give DeFi investors the option to stake LP (Liquidity Pool) tokens and gain high daily interest rates. These LP tokens are a combination of two different tokens that enable the vault holder to gain some of the profits made for trading between these two coins. In our example, we will use two coins: $BUSD and $BTD and turn them into an LP token: BTD-BUSD LP.

Note: This guide assumes that you have acquired both $BUSD and $BTD before starting. If not: check the "how to exchange on pancakeswap" guide.

Step 1: Pancakeswap

Step 2: Adding liquidity pools

After clicking on "Liquidity" the above interface will open in Pancakeswap. Here you will provide the tokens for the LP pool.

  • First, click on "Add Liquidity".

  • Then click the top token name (This one is usually set to BNB).

  • Change BNB into BUSD.

  • Then click on the bottom token name (this one is usually empty).

Note: Pancakeswap doesn't know every token yet so we will probably have to add BTD manually. To do so enter the BTD contract (0xD1102332a213E21faF78B69C03572031F3552c33) in the following screen.

Protip: After entering the BTD contract you can click on "add" to get Pancakeswap to remember the coin for future use.

Step 3: Adding supply

After adding both $BUSD and $BTD to your liquidity pool you can add tokens to it to generate LP tokens.

  • Add the amount of BUSD and BTD you want to place in the pool (the distribution will be shown on pancakeswap. But the BUSD and BTD amounts must be equal in value).

  • Click on "Approve" (will only be shown the first time you add to a pool).

  • Click on "Supply".

  • Give an 'OK' on the popup that your wallet of choice is giving you.

  • Wait a short while for the transaction to be completed.

Congratulations: You now have an LP token that you can stake somewhere.

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