Liquidity is a significant factor for any financial asset, specifically when investing in crypto assets. Liquidity provider tokens are attractive in the crypto industry to many crypto investors as these assets allow generating passive income. Any individual can follow this yield farming feature to earn more from the crypto marketplace.
However, when choosing the best asset, it is mandatory to check on several factors as many tokens are in the same group, and all instruments don’t generate the same earning. This article will introduce you to the top five Liquidity provider (LP) crypto projects worth picking up and profit now.
How to choose the best Liquidity Provider (LP) crypto project?
This era of technology introduces us to Decentralized Exchange (DEX) platforms that enable alternative ways to earn money from the marketplace alongside trading or investing, such as staking or depositing assets on liquidity pools for a specific period. The term “liquidity” is the ability of any particular asset to convert into cash or other crypto coins without having difficulty. Low liquidity means the asset involves volatility, and it causes spikes in the asset price. Meanwhile, high volatility means a stable market condition with few price fluctuations.
However, choosing the best LP tokens involves checking several factors such as:
- Try to select tokens with a higher volume.
- Try to choose crypto assets with low commissions, swaps and competitive spreads.
- Try to select liquidity providers with reliability and stable data feed.
- Try to select liquidity providers that allow slippage, fast executions, and minimum requirements.
- Select LP crypto projects that enable Fix protocol to access historical data and enable multi-asset liquidity.
The top five LP crypto projects to pick up and profit now
Many liquidity provider platforms are available, and more are coming as this sector is worth $100 billion within a brief period. The top five among them are:
- Uniswap (UNI: $6.6B)
- Curve DAO token (CRV: $1.37B)
- PancakeSwap (CAKE: $2.2B)
- SushiSwap (SUSHI: $547M)
- Balancer (BAL: $106M)
Uniswap (UNI)
What is Uniswap?
It is a popular platform among crypto investors, a Decentralized Trading protocol depending on blockchain. The launching period of this platform is in Nov 2018, and Hayden Adams is the creator of this platform and an Ethereum developer. UNI, the native token of this platform floating near $11.08 today with a 24-H trading volume of $167,614,285. This token is currently available on many major crypto exchanges such as CoinFLEX, Binance, FTX, dYdX, and OKX.
Other information of this crypto project is here:
- Fully diluted market cap: $11,076,915,919
- Live market cap: $7,000,271,320
- Total supply: 1,000,000,000 UNI
- Circulating supply: 632,256,616.89 UNI
- Max supply: 1,000,000,000 UNI
- Total Value Locked (TVL): $7,512,091,637
- Volume / market cap: 0.02371
How does Uniswap work?
This platform facilitates the automated trading of DeFi tokens.
Curve DAO token (CRV)
What is Curve?
The Curve is a decentralized exchange platform. The launching period of this platform is Jan 2020. The CEO and the founder are the same of this platform, Michael Egorov. CRV, the native token of this platform floating near $3.09 today with a 24-H trading volume of $314,730,618. This token is currently available on many major crypto exchanges such as Binance, CoinFLEX, OKX, CoinTiger, and FTX.
Other information of this crypto project is here:
- Fully diluted market cap: $10,205,677,488
- Live market cap: $1,372,767,356
- Total supply: 1,690,186,988 CRV
- Circulating supply: 444,229,297.35 CRV
- Max supply: 3,303,030,299 CRV
- Total Value Locked (TVL): $19,590,945,377
- Volume / market cap: 0.2278
How does Curve work?
It is a DEX platform for stablecoins, and to manage liquidity, it uses the AMM protocol.
PancakeSwap (CAKE)
What is PancakeSwap?
PancakeSwap is a Decentralized exchange platform. The launching period of this platform is Sep 2020. CAKE, the native token of this platform floating near $8.31 today with a 24-H trading volume of $165,342,134. This token is currently available on many major crypto exchanges such as Bybit, Binance, Mandala Exchange, CoinTiger, and Bitget.
Other information of this crypto project is here:
- Fully diluted market cap: $2,234,245,152
- Live market cap: $2,231,129,736
- Total supply: 267,934,437 CAKE
- Circulating supply: 267,934,437.40 CAKE
- Max supply: Not available
- Total Value Locked (TVL): $4,808,141,848
- Volume / market cap: 0.07413
How does PancakeSwap work?
This platform uses an AMM model that allows individual users to exchange crypto assets, stake LP tokens, and earn transaction fees by providing liquidity or farming.
SushiSwap (SUSHI)
What is SushiSwap?
You can consider SushiSwap as a modified fork of the Uniswap platform. The launching period of this platform is Sep 2020. SUSHI, the native token of this platform floating near $4.30 today with a 24-H trading volume of $127,754,880. This token is currently available on many major crypto exchanges such as Binance, CoinFLEX, FTX, OKX, and dYdX.
Other information of this crypto project is here:
- Fully diluted market cap: $1,074,599,376
- Live market cap: $547,298,602
- Total supply: 240,237,309 SUSHI
- Circulating supply: 127,244,443.00 SUSHI
- Max supply: 250,000,000 SUSHI
- Total Value Locked (TVL): $4,597,215,147
- Volume / market cap: 0.2327
How does SushiSwap work?
This platform is an AMM example that uses smart contracts to create markets for any crypto asset.
Balancer (BAL)
What is Balancer?
The Balancer is an AMM. Meanwhile, Ethereum blockchain is the developing platform of Balancer. The launching period of this platform is Mar 2020. BAL, the native token of this platform floating near $15.28 today with a 24-H trading volume of $32,446,675. This token is currently available on many major crypto exchanges such as Binance, CoinTiger, OKX, Mandala Exchange, and FTX.
Other information of this crypto project is here:
- Fully diluted market cap: $1,529,890,439
- Live market cap: $106,233,007
- Total supply: 35,725,000 BAL
- Circulating supply: 6,943,831.00 BAL
- Max supply: 100,000,000 BAL
- Total Value Locked (TVL): $3,302,718,406
- Volume / market cap: 0.3044
How does Balancer work?
This platform follows an AMM protocol that functions as a liquidity provider, a self-balancing weighted portfolio, and a price sensor. This platform operates in several pools such as smart pool, private pool, and shared pool.
Pros & cons
| Pros | Cons |
| Some LP projects offer captivating fees alongside generating outcomes in different layers. | These assets involve impermanent loss. |
| Investors control their assets. | Liquidity providers lose money when asset declines supply and the price increases. |
| These crypto-assets are available for everyone. | There is a possibility of impermanent loss due to inequality in the number of instrument pairs of the pool. |
Final thought
Liquidity is a significant factor in the financial market. It enables cutting expenses by ensuring assets are readily exchangeable at a consistent price, keeping a considerable amount of them, and making assets more liquid.
