How to build Liquidity Mining/Providing (DeFi)?

More complex DeFi processes such as liquidity mining/-providing of popular dApps (Uniswap, SushiSwap, ShibaSwap, etc.) are already automatically imported via your public key into your Wallet Depot.

If your DeFi transactions have not been recorded automatically or only partially (as unlinked deposits and withdrawals), you can replicate or complete them manually in multiple Unsynced Depots.

The assets (Asset1 and Asset2, etc.) provided as liquidity to the pool are represented at the time of provision in equal parts of Asset1 and Asset2 as a "Trade" for a so-called LP token.

The fees, which are generated by providing liquidity, are generally reflected in an increase in the value of the LP tokens and are not recognized as own transactions. These revenues are realized upon redemption of LP into Asset1/Asset2.


Example of providing ETH & UNI as liquidity into an LP pool: 

  1. Entry into the LP pool:
    50% ETH "Trade" to 50% LP tokens.
    50% UNI "Trade" to 50% LP tokens.
  2. Exit out of the LP pool:
    50% LP token "Trade" to 50% ETH.
    50% LP token "Trade" to 50% UNI.

When using our DeFi wallet imports, the entry and exit from the LP pool is automatically imported as unlinked Deposit and Withdrawal. These open deposits and withdrawals are best linked per pool into an Unsynced Depot, in order to subsequently replicate the trade there as described in the example above. The placeholder "Generic Asset" available in Blockpit can be used as the LP token.

If Staking, Lending or Governance contracts were entered into during the LP Providing, the rewards must be entered as "Staking", "Lending" or "Bounty" according to the contracts from the time of inflow (Claim) or, if applicable, from the time of exit from the protocol.

This process is very similar to the replication of a simple Swap. The only difference is the division of initial assets in equal parts (Asset1 and Asset2, etc.) into several "Trade" transactions and the possibility of additional rewards.


For more information on the taxation of DeFi transactions, see our DeFi blog article.

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