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How to Farm SDM on PancakeSwap: A Step-by-Step Guide

by Shieldeum on

If you're looking to earn rewards in SDM, Shieldeum’s native token, farming on PancakeSwap is a great way to get involved. By participating in yield farming, you can earn SDM tokens while contributing to the liquidity of the Shieldeum ecosystem. In this guide, we’ll walk you through the process of farming SDM on PancakeSwap, from connecting your wallet to withdrawing your rewards.

What Is Yield Farming?

Yield farming is a process where you provide liquidity to a decentralized exchange (DEX) like PancakeSwap and, in return, earn rewards. These rewards come in the form of tokens. In this case, by farming SDM on PancakeSwap, you'll be providing liquidity to the SDM/USDT pair, and in return, you’ll earn SDM & USDT.

How Does Farming SDM Work on PancakeSwap?

Farming SDM on PancakeSwap is a simple process involving a few key steps: connecting your wallet, adding liquidity, and staking it in the farm to start earning rewards. Let’s break it down step by step.

Step 1: Connect Your Wallet

Before you can start farming SDM, you’ll need to connect your crypto wallet to PancakeSwap. Supported wallets include MetaMask, Trust Wallet, and Binance Chain Wallet. Here’s how you can do that:

  1. Go to the PancakeSwap website: Open your browser and navigate to PancakeSwap.
  2. Connect your wallet: Click on the "Connect" button located in the top right corner. Choose your wallet type and follow the on-screen prompts to connect your wallet.

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Once your wallet is connected, you can now add liquidity.

Step 2: Add Liquidity for the SDM/USDT Pair

Before you can farm SDM, you need to provide liquidity to the SDM/USDT pair on PancakeSwap. Here’s how:

  1. Go to the "Liquidity" section: On the PancakeSwap homepage, navigate to "Earn" and then to the "Farm/Liquidity" tab in the menu.
  2. Click on "My Positions" 
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  3. Add liquidity: Click on the "Add Liquidity" button. From here, select the SDM and USDT tokens. You’ll need to supply both tokens:
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  4. Select range: v3 liquidity on Pancakeswap allows you to select your own range. Our recommendation would be 50% or Full range. Put in as much SDM and the required USDT as you want to use for farming.
  5. Click on Add: After approval, confirm the liquidity you wish to add. Once you confirm, you’ll receive LP (Liquidity Provider) tokens, which represent your share of the liquidity pool.

Step 3: Claim Your SDM Rewards

After you’ve staked your LP tokens in the SDM/USDT farm, you’ll begin earning SDM and USDT as rewards. Here’s how to claim them:

  1. Check your farming rewards: Go to this page: https://pancakeswap.finance/liquidity/positions
    you’ll see your active farm. Click on the farm for more details and to claim.
  2. Claim your rewards: Click on the "Collect" button to withdraw your earned SDM and USDT tokens. These will be sent directly to your wallet.

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Step 5: Withdraw Your LP Tokens (Optional)

If you want to exit the farm and stop earning rewards, you can withdraw your LP tokens at any time:

  1. Go to the "My positions" tab: https://pancakeswap.finance/liquidity/positions and click on your farm.
  2. Click “Remove”: You’ll be prompted to confirm the withdrawal of your LP tokens. Once confirmed, your SDM and USDT tokens will be returned to your wallet.

Important Notes About Farming SDM

  • Rewards Frequency: The rewards you earn are distributed in real-time, but you can choose when to claim them.

  • The Risk of Impermanent Loss

    One important consideration when providing liquidity on PancakeSwap is impermanent loss. This occurs when the price of the tokens you’ve supplied to a liquidity pool changes relative to each other.

    Here’s how it works: when you provide liquidity to the SDM/USDT pool, you’re required to deposit both SDM and USDT in equal value. If the price of SDM increases or decreases significantly compared to USDT during the time your funds are in the liquidity pool, the value of your LP tokens may decrease. This is known as impermanent loss because it is only realized if you withdraw your liquidity at that moment, and the loss may be "impermanent" if the prices of the tokens revert to their original state.

    To mitigate impermanent loss, it's important to:

    • Monitor the price movements of SDM and USDT closely.
    • Understand that high volatility in token prices can lead to significant impermanent loss, especially in the short term.
    • Consider holding your LP tokens long-term if you believe in the growth of SDM, as rewards may outweigh temporary losses.

    While impermanent loss is a risk, the rewards from farming can help offset it. Always assess the risks and make informed decisions based on your investment strategy.

Shieldeum’s Incentivized Farm Coming Soon!

Shieldeum is working on launching an incentivized farming program on PancakeSwap, which will offer additional rewards to those providing liquidity to the SDM/USDT pair. Stay tuned for updates on how you can earn even more SDM by participating in this upcoming program!

Conclusion

Farming SDM on PancakeSwap is a great way to earn passive rewards while supporting the liquidity of the Shieldeum ecosystem. By adding liquidity to the SDM/USDT pair and staking your LP tokens, you’ll start earning SDM tokens and USDT, which you can claim at any time. Just make sure to manage your risks and stay informed about the potential impacts of impermanent loss.

Ready to get started? Head over to PancakeSwap, connect your wallet, and start farming today!

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