How To Withdraw Liquidity From Blueshift Portfolios In Very Easy Steps
Blueshift is the pioneer of Liquidity Portfolios — a liquidity-providing system that improves on the Liquidity Pools method of AMM and is recognizable for reducing the risk of impermanent loss considerably, even to 0.
Liquidity Pools are the DeFi1.0 standard of liquidity provision and with the continuous evolution of technology and systems for better ways of functions, it is only normal that there is an improvement to the AMM model we have become conversant with.
Blueshift introduced Liquidity Portfolio as a more advanced way of providing liquidity to its DEX, which provides way more liquidity than the average Liquidity Pools because of the inclusion of several tokens in a pool.
Previously, I talked about how to provide liquidity to Blueshift Liquidity Portfolios, giving a detailed process to follow. You can read it here: https://link.medium.com/1NIsiZpVFub
In this article, I’ll be taking you on a similar process, but this time, on how to withdraw liquidity from a Blueshift Portfolio.
But before we dive into that, let’s figure out what distinguishes Blueshift’s Liquidity Portfolios from the regular Liquidity Pools.
Differences Between Liquidity Pools and Liquidity Portfolios
1. Liquidity pools are made up of pairs — only 2 tokens in a pool, so they can be referred to as liquidity pair pools. On the other hand, Liquidity Portfolios have more than 2 tokens that make up a pool.
2. To provide liquidity in a liquidity pool, stakers need to provide the tokens in the pair. But in Liquidity Portfolios, stakers can provide liquidity with one token type.
3. When liquidity is provided to Liquidity Portfolios, the impermanent loss is spread over all the tokens in the portfolio, the more tokens they are in a Liquidity Portfolio, the more IL is reduced. But in Liquidity Pools, the mechanism is different with only 2 tokens in a pool.
Currently, from a technological point of view, there’s no limit to the number of tokens a Liquidity Portfolio can contain. But Blueshift DEX offers 8 different liquidity portfolios and new portfolios will continue to be added.
Each portfolio will get its “liquidity portfolio manager”, which will be selected by the DAO councillors, who, in turn, are elected directly by the Blueshift community via the Blueshift DAO.
To provide liquidity rewards for liquidity providers, Blueshift generates these rewards from 0.3% of its trading fees. Right now, on Blueshift, APRs vary from 40 to 500%
How To Withdraw Liquidity From Blueshift Portfolios
To withdraw liquidity to Blueshift Portfolios, take the following steps:
1. Go to the Portfolios page of Blueshift: https://app.blueshift.fi/#/portfolios
2. Connect your MetaMask wallet.
3. Your next step is to select and expand the portfolio of your choice and click on “Manage”.
For my example, I will be withdrawing from “Stablecoins Portfolio”.
4. Click on “Withdraw” to proceed to withdraw liquidity.
5. Enter the total liquidity amount you want to withdraw in USD.
I am withdrawing $10
The set of LP tokens that can be withdrawn without any loss will be automatically selected.
6. Arrange the token order of withdrawal by dragging and dropping them. The higher a token is in the list, the more amount of that token you want to withdraw.
You can also select/unselect other tokens according to what you want or don’t want.
I needed more bUSDC, so I dragged and dropped it at the top of the list.
But then I recalled I needed bDai only, so I unselected all the other options.
Now, there is a loss of 0.32%, which is $0.02 and that is too much to pay.
To reduce the losses, I select bUSDC because it is also okay for me to get the stablecoin.
The loss has now been reduced to 0.23%, which is $0.02 and I’m okay with paying that.
7. Now, you’re ready! Click on Withdraw to proceed.
8. Cross-check all information in the pop-up window and make sure you are okay with everything, then click “Withdraw” again.
9. Go on to confirm the transaction in your wallet.
Congrats! Your transaction has successfully been completed!
Check your wallet and you will see that the token balance has increased.
Go on and enjoy!
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