# 🟢 Chapter 2 — Adding & Removing Liquidity

Adding liquidity means depositing two tokens into a pool so others can swap between them. In return, you earn a share of the trading fees. Removing liquidity is simply taking your tokens back out. You can stake you liquidity tokens in our Farm for additional liquidity provider rewards. 

{% embed url="<https://www.youtube.com/watch?index=3&list=PLyJJRdXdJMBHU5PCRDQlkk3gWqi--CaL1&t=9s&v=C76TbXzYSQs>" %}

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### Before you add - liquidity vocabulary

* Slippage – The small difference between the expected price and the executed price, caused by market movement during your trade.
* Price Impact – How much your trade changes the pool’s price. Large trades in small pools = bigger impact.
* Liquidity Pair – Both tokens must have a pool. If one doesn’t exist, you can create it
* Impermanent Loss – If token prices move a lot while in the pool, the value of your deposit may end up lower than just holding the tokens.

On SuiDex, liquidity is always kept 50/50, so your pair never goes out of range. Liquidity providers earn 0.015% of every trade, which are auto-compounding rewards. If you stake your LP in SuiDex farms, you’ll also earn Victory tokens on top of the compounded yield.&#x20;

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### How to add liquidity

1. Connect your wallet
2. Go to Add Liquidity:  <https://dex.suidex.org/pool#/addliquidity>
3. Select both tokens for the pool
4. Enter the amount — ( If the pool exists, SuiDex auto-calculates the matching amount in the second asset. If no pool exists check chapter 3 - Opening a new pool )
5. Review liquity status and pool share at the top of the modal.&#x20;
6. Confirm and approve in your wallet

<figure><img src="/files/91eqrJTPtyvH80ba4TXV" alt=""><figcaption></figcaption></figure>

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### How to remove liquidity

1. Navigate to the SuiDex header and go to "Pool" and "My Positions".&#x20;
2. Pick the pool you want to withdraw from
3. Choose how much to remove
4. Confirm and approve in your wallet

If liquidity tokens have been staked in SuiDex Farm, they must first be unstaked from the Farm before being visible in "My Positions" on SuiDex Pool page.&#x20;

<figure><img src="/files/GensOWSLBoxFGuzikdVG" alt=""><figcaption></figcaption></figure>

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💡 Tip: Providing liquidity earns trading fees and Farm rewards, but your deposit can shift in value compared to just holding. This is called impermanent gain and loss. Always balance reward vs. risk.

**To understand impermanent loss please refer to this article:** <https://cointelegraph.com/explained/what-is-impermanent-loss-and-how-to-avoid-it>


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