Overview

Minswap is an automated market maker (AMM) decentralised exchange (DEX) built on the Cardano blockchain that allows users to swap assets, provide liquidity, participate in yield farming and even launch tokens. It is the largest DEX regarding users and liquidity on Cardano, giving it a big advantage over others in the ecosystem with less price impact and slippage across various trading pairs.

Whether you’re a beginner or an experienced DeFi user, Minswap offers a user-friendly interface with features to enhance your trading and liquidity provisioning experience.

This course will give you an overview of all the core features Minswap offers, giving you the knowledge and tools you need to make the best trades in the Cardano ecosystem.

Key Features of Minswap V2

• Liquidity Pools: Users can add liquidity to various token pairs and earn trading fees.

• Swapping: Minswap supports seamless token swaps with competitive prices and low slippage.

• Staking and Yield Farming: Users can stake their LP tokens to earn additional rewards through yield farming.

• User-Friendly Interface: Minswap V2 has an intuitive interface for new and seasoned DeFi participants.

• Adjustable Fees: LPs can customise fee structures for specific liquidity pools, optimising their returns.

• Large liquidity pools: Large liquidity pools allow optimal trades with low price impact and slippage for large traders.

Quick Start Guide

• Connect a Wallet: Minswap supports Cardano-compatible wallets such as Lace, Eternl, or Typhon. Connect your wallet to start interacting with the platform.

• Deposit Funds: Deposit ADA or other supported tokens into your wallet. You’ll need these tokens to provide liquidity or participate in trades.

• Explore Pools: Navigate to the “Markets“ section and browse the available tokens & liquidity pools. Choose a pair to provide liquidity or swap tokens.

• Start Trading or Providing Liquidity: If you’re a trader, you can start swapping tokens immediately. You can add your assets to pools and earn fees if you’re a liquidity provider.

What Has Improved from V1 to V2

Minswap V2 introduces several key improvements over its predecessor, enhancing user experience and functionality. These improvements include:

1. Enhanced User Interface (UI) V2 features a cleaner, more intuitive design with better navigation, making trading, managing liquidity, and tracking your earnings easier via the new portfolio tracker. Advanced tools and real-time data help users make informed decisions with a more responsive layout across devices.

2. Adjustable Fee Structures

V2 allows liquidity pool creators to set adjustable fees, providing flexibility to optimise returns based on market conditions and the characteristics of the token pairs.

This feature helps users balance between liquidity provision rewards and trading costs.

3. Dynamic Fee Model

A dynamic fee model has been implemented in V2, automatically adjusting fees based on market volatility and liquidity levels. This model ensures optimal trading conditions for both traders and liquidity providers.

4. Improved Liquidity Pool Management

V2 supports the creation of custom pools with specific tokens and more granular control over liquidity provision. Users can now add liquidity more efficiently, manage their pool shares, and monitor their earnings.

5. Higher Security and Smart Contract Optimisation

Minswap V2 introduces enhanced security features, ensuring a safer DeFi experience for users. The platform has undergone extensive auditing and optimisation to reduce risks, improve performance, and prevent vulnerabilities.

6. Yield Farming Enhancements

The yield farming experience has been streamlined in V2. LPs can now stake their LP tokens more easily and participate in incentive programs for additional rewards.

Prerequisites Before You Start Your DeFi Journey on Minswap

Ensuring you’re well-prepared before diving into Minswap and the DeFi ecosystem is important. Here are some key considerations and tools you’ll need:

1. Understanding DeFi Basics Familiarise yourself with decentralised finance (DeFi) principles, including liquidity pools, automated market makers (AMMS), and yield farming.

Learn how DeFi protocols work and the risks and rewards of participating in liquidity provisioning.

2. A Cardano-Compatible Wallet Set Up a Wallet: To interact with Minswap, you’ll need a Cardano-compatible wallet, such as Lace, Eternl, or Typhon.

Fund Your Wallet: Ensure your wallet is funded with ADA and any other tokens you wish to trade or provide liquidity. You’ll need ADA for transaction fees.

3. Knowledge of Token Pairs and Liquidity Pools Understand the token pairs available on Minswap and the importance of liquidity pools. Consider the risks, especially impermanent loss, before contributing to a pool.

Research the token projects you’re interested in and evaluate their stability and potential for growth.

4. Risk Management and Strategy Impermanent Loss: Be aware of the risk of impermanent loss, which occurs when the price of assets in a liquidity pool diverges.

Market Volatility: The crypto market is volatile, so always have a risk management strategy. Diversify your investments and use tools to track market movements.

5. Transaction Fees Understand how transaction fees work on Minswap. Every swap and liquidity transaction will incur a small fee, typically paid in ADA.

Review the adjustable fee model in V2 and choose pools that align with your risk/reward preferences.

6. Familiarise Yourself with the Platform’s Features Take time to explore Minswap’s interface and features. Practice swapping tokens, adding liquidity, and tracking your pool earnings.

Read up on Minswap’s incentive programs, such as yield farming, and how to stake LP tokens for additional rewards.

Minswap V2 enhances the DeFi experience by introducing powerful new features such as adjustable fees, dynamic fee models, and improved liquidity pool management. Before getting started, ensure you understand the basics of DeFi, set up a compatible wallet, and manage your risk. With these preparations, you can confidently participate in the Minswap ecosystem and begin optimising your returns through liquidity provision, trading, and yield farming.