Zap In & Out
What is Zap In?
“Zap In” is a feature on Minswap that simplifies adding liquidity to a liquidity pool (LP) by automatically converting a single asset into the necessary pair of tokens. In traditional decentralised exchanges (DEXs), providing liquidity requires a user to supply equal amounts of two different tokens for the specific liquidity pool. Zap In streamlines this process by allowing users to deposit a single token, and the platform handles the conversion into the appropriate token pair.
This is very useful when you want to provide liquidity into a pool of a new token that you do not yet have.
How Does Zap In Work?
Select a Pool: The user selects the liquidity pool to which they wish to contribute. For example, a user may want to provide liquidity to an ADA/USDM pool.
Single Token Deposit: Instead of needing to deposit both ADA and USDM in equal values, the user can use the Zap In feature to deposit only ADA or only USDM.
Automated Conversion: The Zap In feature automatically swaps half of the deposited token (e.g., ADA) into the other token needed for the pool (e.g., USDM) via a decentralised exchange. This happens in the background, simplifying the process for the user.
Liquidity Provision: After the conversion, the two tokens are added to the liquidity pool, allowing the user to become a liquidity provider (LP) and earn rewards from trading fees or incentives tied to the pool.
Benefits of Zap In
Convenience: Users no longer need to manually swap tokens before adding liquidity, saving time and reducing complexity.
Reduced Transactions: Normally, adding liquidity involves multiple transactions (swapping one asset for another and then adding liquidity). Zap In reduces this to a single transaction, lowering transaction fees and streamlining the process.
Lower Slippage Risk: By handling the swap in one step, Zap In reduces the chances of experiencing high slippage when converting one token to another, especially in volatile markets.
Enhanced User Experience: For users unfamiliar with liquidity pools or token swaps, Zap In makes the process more accessible by simplifying liquidity provision to a few clicks.
Use Case Example
Let’s say you hold ADA and want to provide liquidity to the ADA/USDM pool. Instead of manually swapping half of your ADA for USDM and then providing both tokens to the pool, Zap In allows you to deposit ADA. The system automatically converts half of the ADA into USDM and provides both tokens to the pool in the correct ratio, allowing you to start earning liquidity rewards immediately.
How to Zap In Liquidity
Follow these steps to learn how to easily zap liquidity into a liquidity pool. In this example, we will be using an ADA and Djed trading pair. This tutorial assumes you have your wallet set up and have it funded with ADA.
Total time: 10 minutes
1. Select a token to provide liquidity
From the home page of the Minswap website, click on “Market” and choose the trading pair you wish to provide liquidity into.
2. Choose your token & click “Trade”
Choose the token pair by clicking Trade against the token you wish to provide liquidity into.
3. Go to “Pool information”
Navigate to the pool information of the trading pair.
4. Click on “Add LP”
Then choose the Zap In option.
5. Select your deposit token
In this case we are choosing ADA. In most cases, when users are Zapping Into a LP, they most likely will be using ADA.
6. Define the amount of ADA to deposit
When you set the amount of ADA you wish to deposit, you will be shown the amount of LP tokens you will receive in exchange.
7. Click “Zap now” to continue
Confirm the action.
8. Sign the transaction and submit
Approve the transaction by signing it with your wallet.
9. Success – you have now performed a Zap In
You will receive LP tokens representing your position in the pool.
10. Check your liquidity
You can check your liquidity at any time by navigating to Earn > Liquidity. This screen will show you all of your liquidity positions on the DEX.
Zap In on Minswap is a user-friendly feature designed to streamline the process of providing liquidity to liquidity pools. Allowing users to deposit a single token and handling the necessary swaps behind the scenes makes liquidity provision faster, simpler, and more accessible—especially for new users.
What is Zap Out?
“Zap Out” is a feature on Minswap that simplifies the process of withdrawing liquidity from a liquidity pool (LP) by allowing users to convert their liquidity tokens to a single token of their choice. In traditional decentralised exchanges (DEXs), withdrawing liquidity often requires users to take out equal amounts of both tokens they provided, which can be cumbersome and time-consuming. Zap Out streamlines this process by letting users withdraw their funds and convert them into a single asset with minimal effort.
How Does Zap Out Work?
Select the Pool: The user selects the liquidity pool from which they want to withdraw their liquidity. For instance, they may want to withdraw from the ADA/USDM pool.
Specify Withdrawal Amount: The user indicates the amount of liquidity tokens they wish to withdraw. These tokens represent the user’s share of the liquidity pool.
Automatic Conversion: Upon executing the Zap Out, Minswap automatically calculates the amounts of both tokens in the pool corresponding to the withdrawn liquidity tokens. It then converts one of those tokens (e.g., ADA) into the desired single asset (e.g., USDM) or vice versa.
Receive the Chosen Token: After the automatic conversion, the user receives the specified single token in their wallet, making it easy to access funds without managing multiple tokens.
Benefits of Zap Out
Convenience: Users can withdraw liquidity and receive their funds in a single token, eliminating the need to manage multiple tokens from the pool.
Reduced Complexity: By automating the conversion process, Zap Out reduces the complexity involved in withdrawing liquidity, making it more user-friendly for those unfamiliar with the mechanics of liquidity provision.
Fewer Transactions: Typically, withdrawing liquidity involves multiple steps, including withdrawing and swapping the tokens. Zap Out combines these actions into a single transaction, which can lower gas fees and simplify the process.
Flexibility in Token Selection: Users can choose which token they want to receive, providing flexibility to manage their portfolios according to their trading or investment strategies.
Use Case Example
Imagine you provided liquidity to the ADA/USDM pool on Minswap. Now, you want to withdraw your liquidity and prefer to receive USDM instead of holding both ADA and USDM.
Using Zap Out: You select the pool and indicate how much liquidity you wish to withdraw. Minswap calculates the amounts of ADA and USDM you are entitled to based on your pool share. Instead of withdrawing both tokens, Zap Out automatically converts your share of ADA to USDM and delivers the total amount in USDM to your wallet.
How to Zap Out in Minswap
1. Navigate to Liquidity
Go to Earn > Liquidity to see all of your current liquidity positions.
2. Select the Liquidity Pool to Withdraw from
Choose the liquidity pool from which you wish to withdraw liquidity.
3. Click “Remove”
This will open the withdrawal interface.
4. Adjust the Amount of Liquidity to Be Removed
Here, you can define how much liquidity you wish to remove from the liquidity pool.
5. Click “Try Zap Out”
This option will Zap Out your liquidity into one token as opposed to the two tokens in the trading pair.
6. Select the Token and Zap Out
Select the single token you wish to receive (e.g., ADA) and click Zap Out to continue.
7. Sign and Submit
Sign the transaction with your wallet password and click Sign and Submit to continue.
8. Success
Your transaction has been submitted and will be processed by the DEX.
9. Check Your Liquidity
Navigate back to Earn > Liquidity to see your liquidity positions. You should now see the previous positions removed from the Liquidity dashboard.
Zap Out on Minswap enhances the user experience by simplifying the withdrawal of liquidity from pools. By allowing users to convert their liquidity tokens into a single token of their choice automatically, Zap Out reduces the complexity of managing multiple tokens and streamlines the withdrawal process. This feature is particularly beneficial for users looking for efficiency and ease in managing their liquidity positions on the platform.
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