Virtually all Osmosis pools have a phenomenon called "impermanent loss," which, as the name suggests, can result in liquidity providers losing money. But not the new stOSMO / OSMO liquidity pool. With the stOSMO pool, you're constantly 100% exposed to OSMO, just as though you were staking OSMO. This means no impermanent loss. But the yield on the stOSMO pool is much better than plain old OSMO staking yield.
OSMO staking yield = 23% APR, whereas the stOSMO pool APR is currently over 200%!
Due to its lack of impermanent loss and high yield, the stOSMO pool is great for beginners (but also everyone else who loves yield). Here's a quick and simple tutorial on providing liquidity for the stOSMO Osmosis pool.
All you need to start is a Keplr wallet and some OSMO.
Step 1: Convert Some OSMO to stOSMO
To begin, use Stride to convert half your OSMO to stOSMO. Remember, only convert half! You need to leave the other half as OSMO, because when providing liquidity you'll need equal parts OSMO and stOSMO.
1. Visit app.stride.zone
2. Change the token to liquid stake at the top to OSMO
3. Press the ‘Connect wallet’ button at the top of the page and connect your wallet
4. Enter in half your OSMO. You'll be using the other half of your OSMO to match your staked OSMO in the liquidity pool
5. Click ‘Liquid stake’
6. Approve the transaction in the Keplr pop-up window
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2. Deposit your stOSMO into Osmosis
Once you have your OSMO liquid staked, you need to deposit your stOSMO on Osmosis.
1. Visit frontier.osmosis.zone and click ‘Connect Wallet’ on the left-hand side bar
2. Click ‘Assets’ on the left-hand side bar
3. In the ‘Search assets’ bar under ‘All Pools’ type stOSMO
4. Click the ‘Deposit’ next to stOSMO, enter in the amount of stOSMO to deposit, and then press ‘Deposit’
5. Approve the transaction in the Keplr pop-up window
3. Add your stOSMO and OSMO tokens to the stOSMOOsmosis liquidity pool
Now, head to the stOSMO/OSMO liquidity pool. You'll be providing equal parts OSMO and stOSMO liquidity.
1. Click ‘Add / Remove Liquidity’ at the top of the page
2. Enter the amount of stOSMO and OSMO you want to add to the pool
3. Click the ‘Add Liquidity’ button
4. Approve the transaction in the Keplr pop-up window
5. Bond your liquidity pool tokens
Remember, liquidity doesn't earn yield unless it's bonded.
1. Click the ‘Start Earning’ button on the right-hand side of the page
2. Select ‘14 days’ for bonding.
3. Under ‘Amount to Bond’ click ‘MAX’
4. Click ‘Next’
5. Approve the transaction in the Keplr pop-up window
And there you have it! Now you're tranquilly floating in liquidity pool #833, enjoying the sweet APR.