To access PowerPools on our web app, click on the Pools link at the top of the PowerTrade site. This should open the PowerPools AMM Overview screen. Any pools that you currently have will be displayed in the Your Pools screen.
Create a Pool
To create a pool, click on the Create Pool button. This opens the Create Pool screen.
From here you can create a pool in just a few short steps.
- Name the Pool (optional)
- Select Currency Pair
- Specify Deposit Amounts
- Set Markup
- Set Tolerance
- Set Price Range
- Specify Rules (optional)
Step 1: Name the Pool (Optional)
In this optional step, you can specify a custom name for the pool you’re about to create. This will help you keep track of your pools if you plan to divide your liquidity among several pools. Click the + Add Label text field to enter a name for the pool.
Step 2: Select Currency Pair
Click on the Select Pair dropdown menu to choose the currency pair you'd like to use for the Pool. For this example we'll be using ETH-USD.
Step 3: Specify Deposit Amounts
This step requires you to specify how much of each asset in the pair you would like to deposit to this pool to start.
You can manually type in the amount you would like to deposit, or you can click on the Balance amount displayed below the asset ticker to automatically tell PowerPools to use your full PowerTrade wallet balance for the pool.
Please note that the pool needs to be balanced at creation. Creating a pool with an unbalanced amount of liquidity will result in some of that liquidity being traded on the PowerTrade spot markets until the pool is balanced. It is more advisable to start a pool with balanced liquidity so that no unnecessary costs are incurred.
To balance out the pool, manually adjust the liquidity amounts on both legs of the currency pair until the orange warning message disappears.
Step 4: Set Markup
Use the Markup slider to specify the percentage markup that your pool will charge for the privilege of trading its liquidity. Markup percentage can be set to 2 decimal places anywhere between 0.01% and 1.00%.
Setting low markup will encourage the pool to pack small orders tightly together. You will trade more often but in smaller sizes. This favors slow markets.
Setting high markup will encourage the pool to spread orders further apart but in larger sizes. This favors fast markets, but you will make significantly less in slower markets.
Step 5: Set Tolerance
The tolerance of your pool becomes relevant when creating a pool with unbalanced liquidity, or when adding unbalanced liquidity to an existing pool. PowerPools will automatically make spot trades on your behalf to balance out the pool in these events. Use the Tolerance slider to specify the maximum slippage you are willing to accept on these balancing trades. Tolerance can be set to 1 decimal place between the 0.0% and 5.0%.
Step 6: Set Price Range
Specify the price range of the currency pair that you would like the pool to use. While the spot price of the asset is within this range, the pool will remain in range and continue to earn yield. If the spot price of the asset moves outside the range, the pool becomes out of range and will cease to earn yield until the price moves back into the range.
The default lower bound is automatically prepopulated to around -15% of current spot price and the default upper bound is automatically prepopulated to around +15% of the current spot price, but you are free to change these limits as you see fit. You can do so either by using the price range sliders or by manually typing in the upper and lower bounds.
Note: Setting the price range to be wider means that your pool has a higher chance of staying active even in the face of market volatility, but this also means spreads your liquidity across a wider range earning you less markup per trade. Conversely, setting the range to be narrower earns you more markup per trade since your liquidity is concentrated in a smaller range, but this increases the chance of the pool becoming inactive if market volatility causes the spot price of the asset to leave the range.
Step 7: Specify Rules (Optional)
As an optional step, you can specify rules to automate your pool. For more information about automating your pools using rules, please refer to this article.
Step 8: Confirm
Click on the green Create Pool button once you have checked the parameters and are satisfied with the conditions set. This will bring you to the page for your newly created pool. Congratulations! You’ve set up an active pool and it is now earning yield!