Farming Toncoin on the Biswap crypto exchange

With this guide, you’ll learn how to farm your Toncoin on the Biswap decentralized exchange.

What exactly is farming?

Farming is one way to earn a passive income with crypto where pool liquidity providers receive an exchange’s native token in exchange for their services. In other words, farming is a form of providing liquidity — but with better conditions.

If you’re not familiar with how liquidity pools work, start by reading this material.

How do I provide Toncoin liquidity for farming?

1. Before starting, you need to have a browser crypto wallet that the exchange supports. The most convenient wallet to use is MetaMask. You can download the browser extension here.

2. The Biswap decentralized exchange is based on the BNB Chain. This means that you’ll have to add the BNB Chain network and Wrapped Toncoin to your MetaMask account. These first steps should take no longer than a few minutes. Here is a guide on how to do add the two.

3. Now, you have to deposit a small amount of the BNB token because it’s the token needed to take care of transaction fees on BNB Chain. $2–$3 should suffice.

You can buy BNB with fiat on any peer-to-peer exchange — e.g., the Binance crypto exchange.

4. Now you need to send the amount of Toncoin you want to add to the farming pool to your MetaMask wallet. There are two ways to do this:

— You can withdraw Toncoin from your Tonkeeper or TON Wallet to BNB Chain by using the TON–BNB Chain Bridge. Pay attention to the transaction fee.

— You can get an already-wrapped version of the coin on any BNB Chain-based decentralized exchange where Toncoin is traded — e.g., on PancakeSwap or directly on Biswap:

Please note: You also need to have the same value of Tether (USDT) as Toncoin in your wallet.

5. Go to Biswap and click “Connect Wallet” in the top right corner of the landing page.

6. Connect your MetaMask wallet.

7. Find the “Farms” section on the left-hand side of the page and click on it.

8. Enter Toncoin (TON) in the search field.

9. Now you have to declare yourself as a liquidity provider for the TONCOIN-USDT pool. To do this, click on the pool’s name and click on “Get LP.”

10. Here you have to add equal amounts in value of Toncoin and USDT to the liquidity pool. For example, if you want to add $10 of Toncoin, you’ll have to add at least $10 of USDT.

Make sure you’re adding liquidity for the TONCOIN-USDT pair, after which click “Supply.”

11. Confirm the transaction in your MetaMask wallet.

12. Now you have TONCOIN-USDT in your wallet and need to stake them. To do this, go back to the “Farms” section and click on “Stake LP” for the TONCOIN-USDT pair.

13. Click “Max.” to stake all of your tokens, click “Confirm,” and confirm the transaction in MetaMask.

14. Everything’s ready. You’ve just become a liquidity provider for the TONCOIN-USDT trading pair on Biswap and will receive extra income in the form of Biswap’s native token, BSW. You can withdraw your earned BSW at any time by clicking on the “Harvest” button.

15. You can withdraw your paired tokens from the pool at any time as well. Click the “Unstake” button and click “Confirm” in the pop-up window.

16. Go to the “Liquidity” section on the site’s menu on the left.

17. In this section, you can see all the trading pairs for which you’re a liquidity provider. Select the TONCOIN-USDT pair.

18. Click “Remove.”

19. Select the number of tokens you’d like to withdraw from the liquidity pool. For example, click “Max.” if you want to withdraw all of your tokens. Next, click “Approve,” confirm the transaction in your MetaMask wallet, and then click “Remove.”

20. You’ve just withdrawn your tokens from the liquidity pool, and they’ll be re-added to your MetaMask balance.

The risks of farming:

Any kind of crypto investment carries inherent risks. For liquidity providers, there are two perennial risk factors:

• — Impermanent losses
• — Smart contract exploits.

Impermanent losses:

This is a complicated consequence that arises when a token’s value fluctuates, but we’re going to abstain from getting bogged down in technical details.

Nevertheless, this is an important issue, and to understand it well, we recommend reading this Forklog.com article. 

To explain in simple terms:

Impermanent loss is a phenomenon whereby the value of a liquidity provider’s pooled tokens loses value due to fluctuating crypto prices.

Let’s imagine you’ve bought $100 worth of Toncoin and the equivalent in USDT. You can store them in a wallet or add them to a liquidity pool.

Sometimes, simply hodling or storing crypto in a wallet is a better investment strategy than participating in a liquidity pool. 

Smart contract exploits:

There’s always a chance that a hacker could exploit a smart contract, and no one is safe from this event.

In 2020 alone, decentralized finance users lost a combined $100 million as a result of hacker attacks on smart contracts.

Conclusion:

Toncoin farming on the Biswap decentralized exchange is a useful investment instrument that allows users to earn passive income.