Liquidity plays an important role in the viability of an asset’s price. It provides an ideal avenue for trading an asset. It also accommodates different trading parties to participate in buying or selling an asset.
High liquidity in a marketplace creates stability in price, an equilibrium that is acceptable for traders. This is because some external factors, including the number of traders, regulations, and volume, can affect price swings.
Meanwhile, liquidity keeps the price in place and shields it from excessive price swings. It also enables the accuracy of trading strategies.
Cake-LP tokens are the liquidity provider’s tokens for Pancakeswap. Before getting LP tokens, you must have provided liquidity for a token. Liquidity provider tokens are proof that you have contributed or own part of a token’s liquidity.
You can stake your tokens BEP-20 tokens on the Pancakeswap liquidity pool by adding an equal value of a token and BNB to the pool.
You can use your LP tokens to earn yield rewards from transactions. You can also use them in yield farms to earn extra tokens.
A few platforms allow you to stake LP tokens in yield farms by leveraging change in interest value.
However, selling your CAKE-LP tokens means you are removing liquidity and redeeming them back to the tokens you staked.
To sell CAKE-LP tokens, you need to visit Pancakeswap, find the LP token pair, and remove it. This will change your LP tokens back to the pairs you pooled.
Here’s how to sell Cake-LP tokens and remove liquidity on Pancakeswap.
- Navigate to Pancakeswap
- Find CAKE-LP Tokens
- Sell Cake-LP tokens
Before proceeding, ensure you connect only the wallet holding your CAKE-LP tokens to Pancakeswap.
Navigate to Pancakeswap at Pancakeswap.finance on your web browser.
Tap TRADE NOW to enter the DEX’s app. Here, you can see various exchange options and DEX services on Pancakeswap. Choose LIQUIDITY.
Alternatively, you can visit LIQUIDITY POOL by going to https://exchange.pancakeswap.finance/#/pool on your browser.
On the top right corner of the screen, tap CONNECT to connect your wallet. Approve connection by confirming Metamask prompt.
Find CAKE-LP Tokens
Under YOUR LIQUIDITY, choose the Cake-LP token pair you want to sell. This will show you an overview of your pooled amount for each token in the pair.
If you can’t find your CAKE-LP tokens here, simply import the pool you supplied tokens to by clicking FIND OTHER LP TOKENS.
Then, manually choose the two tokens in your CAKE-LP tokens. You can select a token from the token list or via its contract address. Then tap MANAGE THIS POOL.
Sell Cake-LP tokens
Once you’ve seen your LP tokens, tap REMOVE to proceed.
Set the amount or percentage of CAKE-LP tokens you want to sell. You can also set it to MAX to remove all your CAKE-LP tokens.
Click ENABLE and sign the action in your Metamask wallet.
After this, the REMOVE button will become active. Tap the active REMOVE button.
A new window showing the details of your transaction will pop up in Pancakeswap. Click CONFIRM and approve the transaction in your Metamask wallet.
Once the transaction has been executed, you will receive the two tokens in your Metamask wallet.
Meanwhile, if you remove parts of the LP tokens, your balance will be updated in MY LIQUIDITY on Pancakeswap.