Providing liquidity isn’t just for institutional players anymore—it’s for anyone ready to take control and shape the markets. Our new Liquidity Pairs feature makes it easy for everyday users to move from passive traders to active market participants. This guide will show you how to leverage the tools of BeFi Labs to trade assets, analyze market data, and provide liquidity that powers the BTCfi ecosystem—all while earning rewards.
Order Book: Understanding Market Depth
The order book displays active buy and sell orders for your selected trading pair. Think of the green blocks as stacked buy orders and the red ones as sell orders. Together, they provide insights into market depth, helping you understand supply and demand at different price levels.
This information is key for traders because the more stacked orders in the book, the more liquidity is present, making price movements smoother and less volatile. The depth of the order book gives you an edge by showing how likely you are to execute trades at desired prices.
A deep order book is a good order book. When orderbooks are thin, the gap between the buy and sell orders are large. Known as the spread, a wide gap between buy and sell prices makes the asset unattractive.
Pro Tip: Analyzing the order book can help you identify key support and resistance levels.
Providing Liquidity: Be the Market
The order book is where buyers and sellers meet. By entering orders on both sides (buy and sell), liquidity providers become the backbone of the market. A deeper order book means smoother price movements and less volatility.
When you add liquidity to a trading pair on BeFi Labs, you earn fees as the market moves and your orders get matched. Whether you’re providing liquidity for $PUPS/$USDT BRC20 pair or any other BTCfi asset, you play a pivotal role in keeping the trading ecosystem alive and active.
Key Benefit: Earn a portion of trading fees by providing liquidity.
By providing liquidity, you earn 50% of the trading fees generated on that pair.
How to Provide Liquidity on BeFi Labs
Adding liquidity is straightforward. You need to supply both tokens of the trading pair. For example, if you’re providing liquidity for the $PUPS/$USDT pair, you’ll need both $PUPS and $USDT in equal amounts.
If you don’t have both assets, don’t worry! BeFi Labs allows you to quickly swap one token for the other within the terminal before providing liquidity.
Tip: The more liquidity you add, the deeper the market becomes, making it more attractive to other traders.
When you’re ready to withdraw your liquidity, BeFi Labs makes it easy with one-click functionality.
How You Can Power Markets with Liquidity
By understanding how to trade and provide liquidity on BeFi Labs, you’re not just participating in the market—you’re shaping it. As a liquidity provider, you empower yourself and others by ensuring smoother price movements, deeper order books, and a more vibrant trading ecosystem. Whether you’re looking to earn passive income through trading fees or actively build the BTCfi market, the tools are now in your hands.