How to Farm

Learn how to provide liquidity and earn rewards through concentrated liquidity farming on Shadow Exchange.

Breaking Down The Liquidity Page

The Liquidity page is your central hub for discovering and managing liquidity pools on Shadow Exchange. Here's how to navigate and understand the key components:

Header Statistics

At the top of the page, you'll find four key performance indicators:

• Number of pools: Shows the total available liquidity pools (currently 6,416)
• 7D Volume: Total trading volume across all pools in the last 7 days
• 7D Fees: Total fees generated by all pools in the last 7 days
• Rewards this epoch: Current epoch rewards available for distribution

Search and Filter Tools

• Search bar: Find specific pools by token name, symbol, or contract address
• Pool types filter: Filter by different pool categories (Stable, Bluechip, Volatile, etc.)
• Reward types filter: Filter pools by the type of rewards they offer
• Add Liquidity button: Direct access to create new liquidity positions

Pool Information Table

Each pool displays essential information:

• Pool: Token pair with visual icons and pool type indicators (e.g., "0.1008% CL" for Concentrated Liquidity)
• TVL (Total Value Locked): Total value of assets locked in the pool
• APR (Annual Percentage Rate): Expected annual return percentage
• Epoch Rewards: Current rewards available for the active epoch
• 24h Volume: Trading volume in the last 24 hours
• Deposit button: Direct action to add liquidity to the pool

Creating a New CL Position

To start farming, you'll need to create a new Concentrated Liquidity (CL) position. Here's the step-by-step process:

1. Navigate to Add Liquidity

Click the "Add Liquidity" button from the main liquidity page, or select "Concentrated Liquidity" from the navigation tabs.

2. Token Selection

Choose the token pair you want to provide liquidity for:

• Left token box: Select your first token (e.g., S)
• Right token box: Select your second token (e.g., USDC)
• Click the dropdown arrows to access the token selection interface

Token Selection Interface

When selecting tokens, you'll see:

• Search bar: Find tokens by name, symbol, or contract address
• Popular Tokens section: Quick access to commonly traded tokens like SHADOW, x33, GEMS, USDC, USDT, WETH, WBTC, and stS
• Full token list: Complete list of all available tokens with:
  • Token icon and name
  • Contract address (truncated)
  • Your current balance and USD value
  • Price trend indicators

3. Fee Tier Selection (Tick Spacing)

Choose the appropriate fee tier based on your token pair's volatility:

4. Price Range Configuration

Set your liquidity range by defining minimum and maximum prices:

• Min USDC per S price: Lower bound of your liquidity range
• Max USDC per S price: Upper bound of your liquidity range
• Use the +/- buttons to adjust prices in small increments
• The interface shows:
  • Current price relative to your range
  • Percentage deviation from current price
  • Estimated position value

5. Range Type Selection

Choose from predefined range strategies based on your risk tolerance:

Range Visualization and Analysis

The right panel provides crucial visual information to help you make informed decisions:

Price Chart

• 7D Historical Price (orange line): Shows recent price movements to help you understand volatility
• Liquidity Distribution (grey stepped line): Displays where other LPs have concentrated their liquidity
• Selected Range markers: Visual representation of your chosen price range
• Current Price indicator: Shows where the current market price sits relative to your range

Key Metrics

• Estimated APR: Real-time calculation of your expected annual return based on current conditions
• Range width: Shows the number of ticks in your selected range (e.g., "400 ticks")
• Price impact visualization: Helps you understand how your range affects trading efficiency

Legend

• Selected Range (yellow): Your chosen liquidity range
• Current Price (brown): Current market price
• 7D Historical Price (orange): Recent price history
• Liquidity Distribution (grey): Existing liquidity concentration

Position Management and Dashboard

Once you've created a position, you can monitor and manage it through the dashboard:

Key Dashboard Features

• Real-time APR tracking: Monitor your actual returns as market conditions change
• Position value: Track the current USD value of your liquidity position
• Rewards tracking: View accumulated rewards that can be claimed anytime
• Price range indicator: Visual representation showing where current price sits relative to your ranges
• Position management: Add or remove liquidity, adjust ranges, or close positions

Managing Your Position

• Claim rewards: Withdraw earned rewards at any time
• Adjust ranges: Modify your price ranges to optimize for current market conditions
• Add liquidity: Increase your position size
• Remove liquidity: Partially or fully exit your position
• Range rebalancing: Move your ranges to follow price movements

Best Practices for Farming

Start with conservative ranges when you're new to concentrated liquidity farming. Begin with wider ranges (15-30%) around the current price to learn the system without excessive risk, then gradually tighten your ranges as you become more comfortable.

Monitor your positions actively since concentrated liquidity requires regular attention unlike traditional "set and forget" liquidity provision. Check positions daily during volatile periods and set up price alerts when market price approaches your range edges.

Diversify across multiple pools rather than concentrating all capital in a single position. Spread your liquidity across different token pairs, fee tiers, and range strategies to manage risk exposure.

Understand impermanent loss risks which are amplified in concentrated liquidity compared to traditional AMMs. Tighter ranges offer higher APRs but expose you to greater impermanent loss when prices move outside your range.

Use the visualization tools to identify optimal ranges by studying where other LPs concentrate their capital. Areas with high liquidity concentration often indicate popular trading ranges, while gaps might represent opportunities for higher rewards.

Focus on high-volume pools that generate consistent trading fees and rewards. Avoid pools with sporadic or declining volume, and consider longer-term trends beyond just the 24h volume metric.

Develop a systematic approach to position management with clear rules for rebalancing, range adjustments, and exits. This removes emotion from decision-making and ensures consistent strategy execution.