Stake LP Tokens#

Liquidity providers who supply assets to SLOHM trading pairs on OPNet can stake their LP tokens to earn additional protocol rewards. This guide covers what LP staking is, why it matters, and how to do it.

What Are LP Tokens?#

LP tokens (liquidity provider tokens) represent your share of a liquidity pool. When you provide liquidity to a SLOHM trading pair on an OPNet decentralized exchange, you receive LP tokens in return. These tokens track your proportional ownership of the pooled assets.

Holding LP tokens means you are already earning trading fees from swaps in that pool. Staking those LP tokens with the SLOHM protocol earns you additional rewards on top of the trading fees.

Why Stake LP Tokens?#

Staking LP tokens serves two purposes:

• Earn additional rewards. The protocol incentivizes liquidity providers by distributing rewards to staked LP positions. This is in addition to the trading fees you already earn from the pool itself.
• Strengthen protocol liquidity. Deep liquidity pools reduce slippage for all SLOHM traders. By staking your LP tokens, you commit to maintaining liquidity, which benefits the entire ecosystem.

Prerequisites#

Before staking LP tokens, you need:

• An OPNet-compatible wallet. OPWallet or UniSat with a funded wallet.
• LP tokens. You must first provide liquidity to a supported SLOHM trading pair on an OPNet DEX to receive LP tokens.
• Sufficient BTC for fees. Transaction fees are required for approval and staking operations.

Step-by-Step Guide#

1. Provide Liquidity#

If you haven't already, provide liquidity to a supported SLOHM trading pair on an OPNet decentralized exchange. You will receive LP tokens representing your pool share.

2. Connect Your Wallet#

Navigate to the SLOHM app and connect your OPWallet or UniSat wallet.

3. Navigate to LP Staking#

Select the LP staking section in the app interface. You will see the available LP staking pools, their reward rates, and your LP token balance.

4. Approve LP Tokens#

If this is your first time staking LP tokens, approve the staking contract to access your LP tokens. This is a one-time approval per LP token type.

5. Stake#

Enter the amount of LP tokens you want to stake and confirm the transaction. Your wallet will prompt you to sign. Once confirmed, your LP tokens are staked and begin earning rewards.

6. Claim Rewards#

Rewards accumulate over time. You can claim your earned rewards at any point through the LP staking interface.

What's Next?#

When you're ready to withdraw your LP tokens, see Unstake LP Tokens. To learn more about how liquidity provision fits into the protocol's yield strategy, see Reserve Strategies.