Minswap is an automated market maker (AMM) decentralised exchange (DEX) built on the Cardano blockchain that allows users to swap assets, provide liquidity, participate in yield farming and even launch tokens. It is the largest DEX regarding users and liquidity on Cardano, giving it a big advantage over others in the ecosystem with less price impact and slippage across various trading pairs.

Whether you’re a beginner or an experienced DeFi user, Minswap offers a user-friendly interface with features to enhance your trading and liquidity provisioning experience.

This course will give you an overview of all the core features Minswap offers, giving you the knowledge and tools you need to make the best trades in the Cardano ecosystem.


## Key Features of Minswap V2

- **Liquidity Pools**: Users can add liquidity to various token pairs and earn trading fees.
- **Swapping**: Minswap supports seamless token swaps with competitive prices and low slippage.
- **Staking and Yield Farming**: Users can stake their LP tokens to earn additional rewards through yield farming.
- **User-Friendly Interface**: Minswap V2 has an intuitive interface for new and seasoned DeFi participants.
- **Adjustable Fees**: LPs can customise fee structures for specific liquidity pools, optimising their returns.
- **Large liquidity pools**: Large liquidity pools allow optimal trades with low price impact and slippage for large traders.

## Quick Start Guide

- Connect a Wallet:
Minswap supports Cardano-compatible wallets such as Lace, Eternl, or Typhon.
Connect your wallet to start interacting with the platform.
- Deposit Funds:
Deposit ADA or other supported tokens into your wallet. You’ll need these tokens to provide liquidity or participate in trades.
- Explore Pools:
Navigate to the “Markets“ section and browse the available tokens & liquidity pools. Choose a pair to provide liquidity or swap tokens.
- Start Trading or Providing Liquidity:
If you’re a trader, you can start swapping tokens immediately. You can add your assets to pools and earn fees if you’re a liquidity provider.

## What Has Improved from V1 to V2

Minswap V2 introduces several key improvements over its predecessor, enhancing user experience and functionality. These improvements include:

**1. Enhanced User Interface (UI)**
V2 features a cleaner, more intuitive design with better navigation, making trading, managing liquidity, and tracking your earnings easier via the new portfolio tracker.
Advanced tools and real-time data help users make informed decisions with a more responsive layout across devices.

**2. Adjustable Fee Structures**

V2 allows liquidity pool creators to set adjustable fees, providing flexibility to optimise returns based on market conditions and the characteristics of the token pairs.

This feature helps users balance between liquidity provision rewards and trading costs.

**3. Dynamic Fee Model**

A dynamic fee model has been implemented in V2, automatically adjusting fees based on market volatility and liquidity levels. This model ensures optimal trading conditions for both traders and liquidity providers.

**4. Improved Liquidity Pool Management**

V2 supports the creation of custom pools with specific tokens and more granular control over liquidity provision. Users can now add liquidity more efficiently, manage their pool shares, and monitor their earnings.

**5. Higher Security and Smart Contract Optimisation**

Minswap V2 introduces enhanced security features, ensuring a safer DeFi experience for users. The platform has undergone extensive auditing and optimisation to reduce risks, improve performance, and prevent vulnerabilities.

**6. Yield Farming Enhancements**

The yield farming experience has been streamlined in V2. LPs can now stake their LP tokens more easily and participate in incentive programs for additional rewards.

## Prerequisites Before You Start Your DeFi Journey on Minswap

Ensuring you’re well-prepared before diving into Minswap and the DeFi ecosystem is important. Here are some key considerations and tools you’ll need:

**1. Understanding DeFi Basics**
Familiarise yourself with decentralised finance (DeFi) principles, including liquidity pools, automated market makers (AMMS), and yield farming.

Learn how DeFi protocols work and the risks and rewards of participating in liquidity provisioning.

**2. A Cardano-Compatible Wallet**
Set Up a Wallet: To interact with Minswap, you’ll need a Cardano-compatible wallet, such as Lace, Eternl, or Typhon.

Fund Your Wallet: Ensure your wallet is funded with ADA and any other tokens you wish to trade or provide liquidity. You’ll need ADA for transaction fees.

**3. Knowledge of Token Pairs and Liquidity Pools**
Understand the token pairs available on Minswap and the importance of liquidity pools. Consider the risks, especially impermanent loss, before contributing to a pool.

Research the token projects you’re interested in and evaluate their stability and potential for growth.

**4. Risk Management and Strategy**
Impermanent Loss: Be aware of the risk of impermanent loss, which occurs when the price of assets in a liquidity pool diverges.

Market Volatility: The crypto market is volatile, so always have a risk management strategy. Diversify your investments and use tools to track market movements.

**5. Transaction Fees**
Understand how transaction fees work on Minswap. Every swap and liquidity transaction will incur a small fee, typically paid in ADA.

Review the adjustable fee model in V2 and choose pools that align with your risk/reward preferences.

**6. Familiarise Yourself with the Platform’s Features**
Take time to explore Minswap’s interface and features. Practice swapping tokens, adding liquidity, and tracking your pool earnings.

Read up on Minswap’s incentive programs, such as yield farming, and how to stake LP tokens for additional rewards.

Minswap V2 enhances the DeFi experience by introducing powerful new features such as adjustable fees, dynamic fee models, and improved liquidity pool management. Before getting started, ensure you understand the basics of DeFi, set up a compatible wallet, and manage your risk. With these preparations, you can confidently participate in the Minswap ecosystem and begin optimising your returns through liquidity provision, trading, and yield farming.

Lesson 1 - Overview

# Setting Up Your Wallet and Connecting to Minswap

To begin using Minswap, you'll need a Cardano-compatible wallet. Minswap supports a variety of wallets, including:

- MinWallet  
- Nami  
- Eternl  
- Yoroi  
- Lace  
- Flint  
- Typhon  
- GeroWallet  
- Vespr  
- Begin  
- Tokeo  
- Metamask (via Snap)  
- Ledger Live  
- WalletConnect  
- Other CIP-30 compatible wallets  

For this course, we'll use **MinWallet**, a lightweight wallet integrated directly into the Minswap DEX, making it easy for users to get started.

## How to Set Up a New MinWallet

Follow these steps to create a new Cardano wallet using MinWallet:

1. **Click on "Connect Wallet"**  
   Visit the Minswap website and click on the "Connect Wallet" button.

2. **Select "MinWallet"**  
   From the list of wallet options, choose "MinWallet".

3. **Choose "New Wallet"**  
   Click on "New Wallet" to create a new wallet. If you already have a Cardano wallet, you can restore it at this point.

4. **Read the Starting Tips**  
   Review the starting tips provided and click "Next" to proceed.

5. **Obtain Your Seed Phrase**  
   Click "Reveal" to view your unique 24-word seed phrase. This phrase is your wallet's private key and is essential for accessing your funds. Ensure you store it securely and never share it with anyone.

6. **Copy the Seed Phrase**  
   Write down your seed phrase and store it in a safe place. Avoid storing it digitally or online. Once you've securely stored your seed phrase, click "Next".

7. **Confirm Your Seed Phrase**  
   Enter the seed phrase back into the wallet to confirm you've recorded it correctly. This step ensures you can recover your wallet in the future.

8. **Set a Signing Password**  
   Create a password for your wallet. This password will be used to sign transactions and confirm actions within the wallet.

9. **Wallet Setup Complete**  
   Congratulations! You've successfully created your first Cardano wallet using MinWallet.

## Funding Your Wallet

Now that your wallet is set up, you'll need to fund it with ADA to start trading on Minswap.

1. **Copy Your Wallet Address**  
   Expand the wallet menu and copy your wallet's receiving address.

2. **Transfer ADA to Your Wallet**  
   Log into your exchange account (e.g., Binance) or another wallet where you hold ADA.

3. **Send ADA to Your MinWallet**  
   Use the copied address to send ADA to your MinWallet. Ensure you send enough ADA to cover transaction fees and any trades you plan to make.

4. **Wait for Confirmation**  
   Within a few moments, your MinWallet will be funded and ready for use on Minswap.

With your wallet funded, you're now prepared to start trading on Minswap.

> *Note: Always ensure you're using official and secure sources when setting up and managing your cryptocurrency wallets.*


Lesson 2 - Setting Up Your Wallet

Chapter 1 - Getting Started

Price impact refers to the change in the price of an asset caused by a trade.

In decentralised exchanges (DEXs) like Minswap, which utilise an Automated Market Maker (AMM) model, trades do not occur between two parties directly but against liquidity pools. When you trade a large quantity of an asset, it can cause the price to shift; this is known as price impact.

Several factors, including the size of your trade relative to the liquidity in the pool, influence the magnitude of price impact. If you’re trading a large volume compared to the available liquidity, the price impact will be more significant, meaning the asset price will rise or fall in response to your trade.

## Significance of Price Impact on Trading

Price impact is crucial because it directly affects the value of your trade.

Even modest trades can significantly alter the price in low-liquidity pools, resulting in higher buyer costs or lower seller proceeds.

Here’s why it matters:

- **Cost Efficiency**: A high price impact can result in less favourable prices, meaning you may pay more or receive less than expected.
- **Market Volatility**: In volatile markets, price impact can exacerbate price fluctuations, leading to unpredictable outcomes.
- **Slippage Tolerance**: On Minswap and other DEXs, traders can set a “slippage tolerance,” which determines the maximum price change they will accept for their trade. Price impact directly affects this tolerance, and understanding it helps users adjust settings to avoid unexpected losses.

## How to Manage Price Impact on Minswap

- **Check Liquidity Levels**: Before making large trades, evaluate the liquidity of the asset pair you’re trading. High liquidity pools are less susceptible to price impact.
- Minswap pools orders by highest TVL
- Pools on Minswap with liquidity shown as Total Value Locked (TVL) in the millions of ADA.
- **Use Limit Orders**: Minswap offers features like limit orders, which allow traders to set a specific price for their trades, mitigating the risk of a high price impact.
- **Monitor Slippage**: Adjust slippage tolerance settings to balance avoiding failed transactions and minimising adverse price changes.

Understanding the price impact on Minswap is essential for making informed trading decisions, as it can significantly affect the profitability of your trades.

By managing trade sizes, liquidity, and slippage tolerance, traders can minimise the negative effects of price impact and optimise their trading outcomes.


Lesson 1 - Price Impact

Slippage refers to the difference between the expected price of a trade and the price at which it is executed. On decentralised exchanges (DEXS) like Minswap, slippage is more common due to using liquidity pools instead of traditional order books.

There are two types of slippage:  
**Positive Slippage**: When a trade executes at a better price than expected.  
**Negative Slippage**: When a trade executes at a worse price, which is more common and undesirable.

Minimising slippage is critical for ensuring more accurate and cost-effective trades, especially for those trading large volumes or volatile markets.

## Strategies for Minimising Slippage

### Trade in High-Liquidity Pools  
Higher liquidity means less price impact per trade. Before trading, check the Total Value Locked (TVL) in the pool under the “Markets” > “Pools” section on Minswap.

### Use Limit Orders  
Set a specific price at which you’re willing to buy or sell. If the market price deviates beyond your set limit, the trade won’t execute, protecting you from unfavourable prices.

### Monitor Market Volatility  
Trading volatile assets against stablecoins like USDM or Djed can reduce price fluctuations, minimising slippage.

### Adjust Slippage Tolerance Settings  
Adjust your slippage tolerance settings to prevent trades from executing at prices far from your expected rate.

### Trade During Low Volatility Periods  
Executing trades when the market is less volatile can lead to more predictable pricing and reduced slippage.

### Use Stablecoins or Less Volatile Assets  
Assets like stablecoins (e.g., USDM, Djed) are designed to have less volatility, meaning their prices remain relatively stable compared to more speculative cryptocurrencies. When swapping between highly volatile assets, consider using stablecoins as an intermediary. This can reduce the risk of rapid price changes and minimise slippage. For example: $SNEK/$USDM.

---

Minimising slippage is essential for improving trade accuracy and avoiding unexpected losses. You can ensure that your trades are executed at or near the expected price by leveraging strategies such as trading in high-liquidity pools, setting appropriate slippage tolerances, and trading during less volatile periods. On platforms like Minswap, these tactics can help you optimise your trading experience and maximise cost-efficiency.


Lesson 2 - Slippage

Cardano’s unique Extended UTXO (eUTxO) model means decentralised exchanges (DEXs) like Minswap must handle transactions differently than Ethereum-based platforms.

Instead of each user transaction directly interacting with smart contracts, Minswap uses batchers — off-chain services that collect multiple swap requests, bundle them, and submit a single transaction to the Cardano blockchain.

What Are Batchers?
Batchers play a crucial role in the Cardano DEX ecosystem by:

Collecting swap requests from users
Efficiently batching multiple trades into a single transaction
Submitting that transaction to the blockchain on the users’ behalf
This system improves throughput, reduces congestion, and optimises transaction efficiency on-chain.

Why Were Batcher Fees Charged?
Batchers have traditionally charged a small fee (previously around 2 ADA per order on Minswap) to:

Cover the cost of transaction fees on the Cardano network
Incentivise operators who maintain and run the batching infrastructure
Minswap’s 0 Batcher Fee Update
As of May 2025, to celebrate its third anniversary, Minswap has removed all batcher fees for users. Trades now only incur the regular Cardano network fee, making swaps cheaper than ever.

This change is expected to:

Increase trading activity
Lower barriers to entry for new users
Stimulate more liquidity provision
Minswap’s decision underscores its commitment to user experience and to building a more accessible, cost-efficient DeFi environment on Cardano.

View official announcement on X

Lesson 3 - Batchers

Chapter 2 - Trading Overview

Minswap is a decentralised exchange (DEX) on the Cardano blockchain, allowing users to trade (swap) tokens seamlessly in a non-custodial and decentralised manner. Here’s an in-depth look at how swaps work on Minswap:

## What Are Swaps on Minswap?

A swap on Minswap involves exchanging one Cardano-native token for another using liquidity pools. These pools are funded by liquidity providers who deposit pairs of tokens, enabling the automated trading process.

You will find that across all pools, the main trading asset with any Cardano token is ADA, with a few rare cases where liquidity pools have been set up between two exotic pairs. If you wish to swap two tokens for which a liquidity pool doesn’t exist, Minswap will route trades through multiple pools to swap your desired tokens. We’ll cover this topic of auto-routing more in another topic.

The key benefits of swaps on Minswap include:

- **Access to Cardano Assets**: Many high-quality projects only exist on Cardano.  
- **Decentralisation**: No intermediaries or custodians are involved.  
- **User-friendly interface**: Simple for both beginners and experienced users


Lesson 1 - Swapping Assets

# What is a Limit Order?

A limit order is a trade order that allows users to buy or sell assets at a specific price or better. Unlike market orders, executed immediately at the current market price, limit orders give traders more control by setting a predefined price at which the trade will be executed. This feature ensures that users only buy or sell an asset if it reaches their desired price point, which can be beneficial in managing risk and optimising trade outcomes.

## Limit Orders vs. Market Orders

- **Limit Orders**: Allow users to set specific prices for their trades, but the trade is not guaranteed to be executed unless the market reaches the desired price.  
- **Market Orders**: These are executed immediately at the current market price but offer no control over the price, potentially resulting in higher costs or lower returns due to slippage.

## How Limit Orders Work

**Buying with a Limit Order**:  
When placing a limit order to buy an asset, the user specifies the maximum price they are willing to pay. The trade will only be executed if the market price drops to that level or below. For example, if a user sets a limit order to buy Token A at 1.00 ADA, the order will not be executed unless the price of Token A falls to 1.00 ADA or lower.

**Selling with a Limit Order**:  
When placing a limit order to sell an asset, the user sets the minimum price they are willing to sell. The trade will only occur if the market price rises to meet or exceed that level. For instance, if a user wants to sell Token B at 2.00 ADA, the order will only be filled if the price of Token B reaches 2.00 ADA or higher.

## Key Benefits of Limit Orders

- **Price Control**: Limit orders allow users to control the price at which their trades are executed. This can be especially useful in volatile markets, where prices fluctuate rapidly.  
- **Risk Management**: By setting a limit order, traders can ensure they don’t overpay for an asset or sell it for less than they want. This allows for more strategic trading decisions and helps avoid the risks of sudden market movements.  
- **Avoiding Slippage**: Since limit orders are only executed at or better than the specified price, they help traders avoid slippage—the difference between the expected price of a trade and the actual price at which it is executed.  
- **Passive Trading Strategy**: Limit orders allow for a “set and forget” approach. Traders can place their orders and wait for the market to reach the desired price without constantly monitoring market conditions.

## Example of a Limit Order in Action

**Buying Example**:  
A user wants to buy 100 tokens of $SNEK, but the current price is 10 ADA per token, which they feel is too high. The user sets a limit order at 8 ADA, meaning the trade will only execute if the price of $SNEK drops to 8 ADA or lower. If the market reaches this price, the order will be automatically filled.

**Selling Example**:  
A user holds 200 tokens of $SNEK, currently valued at 5 ADA per token. They want to sell only if the price reaches 6 ADA. The user sets a limit order to sell at 6 ADA, ensuring the trade will only occur when the price hits or exceeds this target.

> We can all wish the $SNEK memecoin were at 6 ADA per token.

---

# How to Create a Limit Order on Minswap

Follow these easy steps to create and execute a limit order on the Minswap decentralised exchange.

**Total time: 10 minutes**

### 1. Connect your wallet  
Click on Trade and select the token that you wish to swap. On the swap interface on the right, select **Limit** to start a limit order.

### 2. Input your payment amount  
Select how much of your paying asset you wish to use in this limit order. In this case, we are using 5 ADA to swap for MIN tokens.

### 3. Set your limit price  
Determine your limit price. In this case, we are selecting 10% below the market. When the price of $MIN drops 10% below the current market price, we will trigger a buy.

### 4. Select duration  
In the bottom right of the limit price input box is the duration selection. Here you can set how long you want this action to be active for. In this case, we are selecting 1 week. This means the contract will expire in 1 week's time and assets used in the swap will be returned to our wallet if the conditions for trade aren’t met.

### 5. Place order  
Check over your order details and click “Place order” to proceed.

### 6. Confirm the transaction  
Enter your sending password to authorise the transaction. Click “Sign and Submit” to send your order for processing.

### 7. Success  
Your order is now on-chain and will be processed when the conditions of the limit order are met.

---

## Order Management

At any point in time, you can click on **Your orders** to access your active orders that are waiting for processing. Here you can manage orders that have yet to be processed, cancel, and return the assets to your wallet.

### Manage your orders  
Expand any order you wish to manage. Multiple orders can be selected at the same time and all cancelled. Select the orders you wish to cancel and click “Cancel.” Type in your wallet password and proceed with the process.

---

Limit orders are a valuable tool for traders who want more control over their trades by setting specific price points for buying or selling assets.

They help optimise trade outcomes by avoiding slippage, managing risk, and allowing users to execute trades only when favourable market conditions are met.

Using limit orders on platforms like Minswap can be an effective strategy for improving trading efficiency, especially in volatile markets. Limit orders let you trade while you sleep. Take advantage of them and grow your $SNEK bags.


Lesson 2 - Limit Orders

Chapter 3 - Swaps & Advanced Trading

# What is Liquidity Provisioning?

Liquidity provisioning refers to the process where users (often called liquidity providers or LPs) contribute assets to a liquidity pool on a decentralised exchange (DEX) like Minswap. These liquidity pools consist of pairs of tokens that facilitate trading on the platform, enabling users to swap assets easily without relying on a centralised order book. By adding funds to these pools, liquidity providers enhance market efficiency, reduce slippage, and enable smoother trading experiences.

## Why Provide Liquidity?

- **Earning Passive Income**: One of the primary motivations for providing liquidity is the potential to earn passive income through trading fees generated from users swapping assets in the pool. LPs receive a share of these fees in proportion to their contribution to the liquidity pool.  
- **Incentives and Rewards**: Many DEXs, including Minswap, offer additional incentives for liquidity providers in the form of native tokens or rewards. These incentives can further enhance the overall returns for LPs.  
- **Market Participation**: Providing liquidity allows users to participate in the decentralised finance (DeFi) ecosystem, supporting the platform’s growth and functionality while having a stake in its success.  
- **Arbitrage Opportunities**: LPs can take advantage of price discrepancies between different exchanges. They can access and exploit arbitrage opportunities across various trading pairs by providing liquidity.  

## How Rewards Are Generated

- **Trading Fees**: Every time a trade occurs in a liquidity pool, a small percentage of the transaction is collected as a fee (often around 0.3% on Minswap). This fee is distributed among all liquidity providers based on their share of the total pool. The more volume the pool experiences, the more fees are generated, increasing the earnings for LPs.  
- **Incentive Programs**: Minswap may offer additional rewards to liquidity providers, such as native platform tokens or other incentives. These rewards can be time-limited or tied to specific liquidity pools, encouraging users to provide liquidity during promotional periods.  
- **Yield Farming**: Some liquidity providers participate in yield farming, where they stake their liquidity pool tokens (representing their share of the pool) in specific protocols to earn additional rewards. This can further amplify the overall returns for LPs.  

## Benefits of Liquidity Provisioning

- **Passive Income Generation**: By providing liquidity, users can earn trading fees and additional incentives without actively trading, making it an attractive way to generate income on their assets.  
- **Support for Decentralisation**: Contributing liquidity to a DEX like Minswap helps promote decentralisation in the financial ecosystem, ensuring users can trade without relying on centralised intermediaries.  
- **Liquidity Access**: Providing liquidity ensures sufficient funds in the market for trading, reducing slippage and enhancing the overall trading experience for all users.  
- **Potential for Token Appreciation**: In addition to earning fees, liquidity providers may benefit from the appreciation of the tokens they provide, increasing their overall value over time.  

## Risks of Liquidity Provisioning

- **Impermanent Loss**: One of the primary risks associated with liquidity provisioning is impermanent loss, which occurs when the price of the tokens in the liquidity pool diverges significantly. This can lead to LPs having less value in their assets compared to simply holding them outside of the pool. The greater the price divergence, the higher the impermanent loss.  
- **Market Volatility**: The cryptocurrency market is known for its volatility. Sudden price swings can impact the value of the assets in the liquidity pool and potentially lead to losses for liquidity providers.  
- **Smart Contract Risks**: Providing liquidity involves interacting with smart contracts. If there are vulnerabilities in the contract code or if the platform experiences a hack, liquidity providers may lose their funds.  
- **Regulatory Risks**: As DeFi continues to grow, regulatory scrutiny is increasing. Regulation changes could impact the operation of liquidity pools and their associated incentives.  
- **Liquidity Pool Risks**: In the case of low liquidity pools, large trades can lead to significant price slippage, affecting liquidity providers’ overall profitability.  

---

Liquidity provisioning on Minswap offers users a compelling opportunity to earn passive income while supporting the decentralised trading ecosystem. By contributing to liquidity pools, users can benefit from trading fees, potential rewards, and participation in the DeFi movement. However, knowing the associated risks is essential, particularly impermanent loss and market volatility. By understanding the mechanics of liquidity provisioning, users can make informed decisions that align with their investment strategies and risk tolerance.


Lesson 1 - What is Liquidity Provisioning

# What is Zap In?

“Zap In” is a feature on Minswap that simplifies adding liquidity to a liquidity pool (LP) by automatically converting a single asset into the necessary pair of tokens. In traditional decentralised exchanges (DEXs), providing liquidity requires a user to supply equal amounts of two different tokens for the specific liquidity pool. Zap In streamlines this process by allowing users to deposit a single token, and the platform handles the conversion into the appropriate token pair.

This is very useful when you want to provide liquidity into a pool of a new token that you do not yet have.

## How Does Zap In Work?

- **Select a Pool**: The user selects the liquidity pool to which they wish to contribute. For example, a user may want to provide liquidity to an ADA/USDM pool.  
- **Single Token Deposit**: Instead of needing to deposit both ADA and USDM in equal values, the user can use the Zap In feature to deposit only ADA or only USDM.  
- **Automated Conversion**: The Zap In feature automatically swaps half of the deposited token (e.g., ADA) into the other token needed for the pool (e.g., USDM) via a decentralised exchange. This happens in the background, simplifying the process for the user.  
- **Liquidity Provision**: After the conversion, the two tokens are added to the liquidity pool, allowing the user to become a liquidity provider (LP) and earn rewards from trading fees or incentives tied to the pool.

## Benefits of Zap In

- **Convenience**: Users no longer need to manually swap tokens before adding liquidity, saving time and reducing complexity.  
- **Reduced Transactions**: Normally, adding liquidity involves multiple transactions (swapping one asset for another and then adding liquidity). Zap In reduces this to a single transaction, lowering transaction fees and streamlining the process.  
- **Lower Slippage Risk**: By handling the swap in one step, Zap In reduces the chances of experiencing high slippage when converting one token to another, especially in volatile markets.  
- **Enhanced User Experience**: For users unfamiliar with liquidity pools or token swaps, Zap In makes the process more accessible by simplifying liquidity provision to a few clicks.

## Use Case Example

Let’s say you hold ADA and want to provide liquidity to the ADA/USDM pool. Instead of manually swapping half of your ADA for USDM and then providing both tokens to the pool, Zap In allows you to deposit ADA. The system automatically converts half of the ADA into USDM and provides both tokens to the pool in the correct ratio, allowing you to start earning liquidity rewards immediately.

---

# How to Zap In Liquidity

Follow these steps to learn how to easily zap liquidity into a liquidity pool. In this example, we will be using an ADA and Djed trading pair. This tutorial assumes you have your wallet set up and have it funded with ADA.

**Total time: 10 minutes**

### 1. Select a token to provide liquidity  
From the home page of the Minswap website, click on “Market” and choose the trading pair you wish to provide liquidity into.

### 2. Choose your token & click “Trade”  
Choose the token pair by clicking **Trade** against the token you wish to provide liquidity into.

### 3. Go to “Pool information”  
Navigate to the pool information of the trading pair.

### 4. Click on “Add LP”  
Then choose the **Zap In** option.

### 5. Select your deposit token  
In this case we are choosing ADA.  
In most cases, when users are Zapping Into a LP, they most likely will be using ADA.

### 6. Define the amount of ADA to deposit  
When you set the amount of ADA you wish to deposit, you will be shown the amount of LP tokens you will receive in exchange.

### 7. Click “Zap now” to continue  
Confirm the action.

### 8. Sign the transaction and submit  
Approve the transaction by signing it with your wallet.

### 9. Success – you have now performed a Zap In  
You will receive LP tokens representing your position in the pool.

### 10. Check your liquidity  
You can check your liquidity at any time by navigating to **Earn > Liquidity**.  
This screen will show you all of your liquidity positions on the DEX.

---

Zap In on Minswap is a user-friendly feature designed to streamline the process of providing liquidity to liquidity pools. Allowing users to deposit a single token and handling the necessary swaps behind the scenes makes liquidity provision faster, simpler, and more accessible—especially for new users.


# What is Zap Out?

“Zap Out” is a feature on Minswap that simplifies the process of withdrawing liquidity from a liquidity pool (LP) by allowing users to convert their liquidity tokens to a single token of their choice. In traditional decentralised exchanges (DEXs), withdrawing liquidity often requires users to take out equal amounts of both tokens they provided, which can be cumbersome and time-consuming. Zap Out streamlines this process by letting users withdraw their funds and convert them into a single asset with minimal effort.

## How Does Zap Out Work?

- **Select the Pool**: The user selects the liquidity pool from which they want to withdraw their liquidity. For instance, they may want to withdraw from the ADA/USDM pool.  
- **Specify Withdrawal Amount**: The user indicates the amount of liquidity tokens they wish to withdraw. These tokens represent the user’s share of the liquidity pool.  
- **Automatic Conversion**: Upon executing the Zap Out, Minswap automatically calculates the amounts of both tokens in the pool corresponding to the withdrawn liquidity tokens. It then converts one of those tokens (e.g., ADA) into the desired single asset (e.g., USDM) or vice versa.  
- **Receive the Chosen Token**: After the automatic conversion, the user receives the specified single token in their wallet, making it easy to access funds without managing multiple tokens.

## Benefits of Zap Out

- **Convenience**: Users can withdraw liquidity and receive their funds in a single token, eliminating the need to manage multiple tokens from the pool.  
- **Reduced Complexity**: By automating the conversion process, Zap Out reduces the complexity involved in withdrawing liquidity, making it more user-friendly for those unfamiliar with the mechanics of liquidity provision.  
- **Fewer Transactions**: Typically, withdrawing liquidity involves multiple steps, including withdrawing and swapping the tokens. Zap Out combines these actions into a single transaction, which can lower gas fees and simplify the process.  
- **Flexibility in Token Selection**: Users can choose which token they want to receive, providing flexibility to manage their portfolios according to their trading or investment strategies.

## Use Case Example

Imagine you provided liquidity to the ADA/USDM pool on Minswap. Now, you want to withdraw your liquidity and prefer to receive USDM instead of holding both ADA and USDM.

**Using Zap Out**: You select the pool and indicate how much liquidity you wish to withdraw. Minswap calculates the amounts of ADA and USDM you are entitled to based on your pool share. Instead of withdrawing both tokens, Zap Out automatically converts your share of ADA to USDM and delivers the total amount in USDM to your wallet.

---

# How to Zap Out in Minswap

### 1. Navigate to Liquidity  
Go to **Earn > Liquidity** to see all of your current liquidity positions.

### 2. Select the Liquidity Pool to Withdraw from  
Choose the liquidity pool from which you wish to withdraw liquidity.

### 3. Click “Remove”  
This will open the withdrawal interface.

### 4. Adjust the Amount of Liquidity to Be Removed  
Here, you can define how much liquidity you wish to remove from the liquidity pool.

### 5. Click “Try Zap Out”  
This option will Zap Out your liquidity into one token as opposed to the two tokens in the trading pair.

### 6. Select the Token and Zap Out  
Select the single token you wish to receive (e.g., ADA) and click **Zap Out** to continue.

### 7. Sign and Submit  
Sign the transaction with your wallet password and click **Sign and Submit** to continue.

### 8. Success  
Your transaction has been submitted and will be processed by the DEX.

### 9. Check Your Liquidity  
Navigate back to **Earn > Liquidity** to see your liquidity positions. You should now see the previous positions removed from the Liquidity dashboard.

---

Zap Out on Minswap enhances the user experience by simplifying the withdrawal of liquidity from pools. By allowing users to convert their liquidity tokens into a single token of their choice automatically, Zap Out reduces the complexity of managing multiple tokens and streamlines the withdrawal process. This feature is particularly beneficial for users looking for efficiency and ease in managing their liquidity positions on the platform.





Lesson 2 - Zap In & Out

# Impermanent Loss

Impermanent loss is one of the most critical risks liquidity providers (LPs) face in decentralised finance (DeFi). Here, we look into an explanation of impermanent loss, why it occurs, its impact on liquidity providers, and strategies to mitigate its effects.

## What is Impermanent Loss?

Impermanent loss refers to the reduction in value that liquidity providers experience when the price of the tokens in a liquidity pool changes compared to their price at the time of deposit. This loss is termed “impermanent” because it only becomes permanent if the LP withdraws funds from the pool when the price disparity exists.

## How It Happens

- Liquidity pools rely on an automated market maker (AMM) mechanism, maintaining a constant ratio between the two tokens.  
- If one token’s price rises or falls significantly relative to the other, the AMM adjusts the pool’s token quantities to maintain this ratio. This adjustment can lead to LPs holding more of the less valuable and less of the more valuable tokens.  

**Example:**  
An LP deposits 2,000 ADA (worth $2,000) and 2,000 USDM into a pool when ADA is priced at $1.  
If ADA prices increase to $3, arbitrage traders adjust the pool by adding USDM and removing ADA to restore the price balance.  
The LP now holds fewer ADA and more USDM, which, when withdrawn, may be worth less than simply holding the original deposit outside the pool.

## Why Does Impermanent Loss Matter?

- **Erosion of Earnings**  
While LPs earn trading fees and rewards, impermanent loss can offset or exceed these gains, making liquidity provisioning less profitable.  
- **Volatility Risk**  
The risk is higher in pools with volatile token pairs, as significant price swings amplify the loss.  
- **Misunderstood Risk**  
Many LPs underestimate or misunderstand impermanent loss, potentially leading to unexpected losses when withdrawing liquidity.

## Factors Influencing Impermanent Loss

- **Price Volatility**  
Greater price changes between the paired tokens result in higher impermanent loss.  
- **Pool Composition**  
Pools with stablecoins or closely correlated assets (e.g., USDM/DJED or ADA/oADA) experience lower impermanent loss due to minimal price divergence.  
- **Trading Volume**  
High trading volumes generate more fees, which can offset the impact of impermanent loss.  
- **Duration**  
The longer funds remain in the pool, the greater the likelihood of price divergence, though long-term trends may stabilise.

## Strategies to Mitigate Impermanent Loss

- **Choose Stable Pair Pools**  
Liquidity pools with stablecoins or tightly correlated assets reduce price divergence risks, minimising impermanent loss.  
- **Diversify Liquidity Provision**  
Spreading assets across multiple pools, including stable pools and high-reward pools, balances potential risks and returns.  
- **Monitor Price Movements**  
Regularly track token prices and withdraw liquidity during favourable conditions to avoid losses.  
- **Leverage Incentive Programs**  
Participate in pools with significant rewards or yield farming incentives to offset potential losses.  
- **Withdraw Early During High Volatility**  
In highly volatile markets, withdrawing liquidity early can prevent larger losses if prices diverge.

## Balancing Rewards with Risks

While impermanent loss is a genuine concern, it does not necessarily make liquidity provisioning unprofitable. LPs should focus on:

- **High-Volume Pools**: These generate substantial trading fees, which can mitigate impermanent loss.  
- **Incentivised Pools**: Rewards like native tokens or additional yield can significantly enhance overall returns.  
- **Portfolio Strategy**: Treat liquidity provisioning as part of a diversified investment strategy rather than an isolated activity.

Impermanent loss is unavoidable in liquidity provisioning on AMM-based DEXes but can be mitigated with informed strategies and careful pool selection.

By understanding how it occurs and using tools and techniques to manage risk, liquidity providers can maximise their rewards while minimising potential losses. With proper planning and monitoring, impermanent loss becomes a manageable challenge within the broader context of decentralised finance.


Lesson 3 - Risks: Understanding Impermanent Loss

Chapter 4 - Liquidity Pools & Providing Liquidity

# Yield Farming on Minswap

The process of yield farming for rewards is straightforward thanks to the great user interface on the Minswap DEX.

By following these steps, you will lock in your liquidity into the yield farms and earn not only transaction fees from the liquidity pool but also yield farming rewards that are being offered by the pool.

In this example, we are going to assume that you already have liquidity in a pool that offers yield farming rewards. In this case, it is the ADA/MIN trading pair.

**Total Time: 14 minutes**

---

## Navigate to Your Liquidity

From the top navigation menu, navigate to **Earn > Liquidity** to see what liquidity you have on the DEX to lock into a yield farm.  
If you don’t have any liquidity on the DEX, please see our other tutorials on how to add liquidity to a pool on Minswap.

---

## Navigate to Farming Options

If you already have liquidity on the DEX, navigate to **Earn > Farm**.  
Here you will be presented with all the pools that have farming options.

---

## Choose a Farm to Stake

From the Farm screen, you will see all of the pools that have farming options.  
If you don’t have liquidity added to a pool yet, you may choose from this screen to add liquidity directly.

---

## Choose Amount of Liquidity to Stake into Farm

On this screen, choose the amount of liquidity pool (LP) tokens you wish to lock into the pool to start yield farming.  
You have 4 predefined options or you can type in your own custom amount of LP.

Click **Stake** to continue.

---

## Confirm, Sign and Submit

Check over the details and enter your signing password.  
Click **Sign and Submit** to continue.

---

## Check Your Status

**Success!**

Once you have signed and submitted your transaction, wait a few minutes and you will see the amount of value you have currently staked to the farm.

You can check from the top navigation **Earn > Liquidity** and navigate to **Your Farm** to see your current farming positions on the DEX.

---

Farming on Minswap is overall fairly easy, only taking one transaction to lock in your liquidity to the DEX and start earning rewards.

There are many ways to optimise your earning potential when it comes to yield farming. Be sure to check out our other resources regarding optimisation of your yield farming rewards.


Lesson 1 - Yield Farming

# Harvesting Yield Farming Rewards on Minswap

From time to time, you may want to harvest or withdraw your yield farming rewards. You can easily see how much you have earned via the farming dashboard over time.

There are many strategies when it comes to withdrawing and harvesting your rewards, as many like to compound their earnings and deposit their rewards back into the farms, while others may want to change and move their positions or sell off the rewards and take profits.

These steps will guide you through the process of harvesting your rewards.

---

## Navigate to Farms

From the top navigation menu, navigate to **Earn > Farm**.

---

## View Your Rewards

Under each farm where you have staked liquidity, you can expand the rewards area to see how much you have accrued and start the harvesting process.

You can filter the view to show only liquidity pools that you have staked liquidity in to make it easier to navigate.

You also have the option of performing a **Multi-Harvest**, which will optimise your transaction costs and harvest up to five pools at a time.

---

## Initiate the Harvest

From a selected liquidity pool farm, click the **Harvest** button to initiate harvesting your rewards.

---

## Sign and Submit

Enter your password and **Sign and Submit** the transaction to start the harvesting process.

---

## Success! The Rewards Have Been Sent

Within a minute, you will see the rewards in your wallet.


Lesson 2 - Harvesting Yield Farm Rewards

Lesson 3 - Withdrawing from Farms

Chapter 5 - Yield Farming

# What is a Liquidity Bootstrapping Event?

A Liquidity Bootstrapping Event (LBE) is a fair launch mechanism used on Minswap to:

- Distribute a new token to the public  
- Bootstrap liquidity for a trading pair  
- Set an initial market-driven price  
- Prevent front-running and whale dominance  

---

## How It Works

### No Starting Price  
Unlike fixed-price launches, the token starts with zero liquidity and no set price.

### Dual Token Pool  
- The team or project provides the new token (e.g., $XYZ).  
- Participants contribute ADA during the LBE window.

### Price Discovery Phase  
- As more ADA is added, the price of the new token dynamically increases.  
- Larger contributors must pay more per token, incentivising early participation and wider distribution.

### Token Allocation  
- At the end of the event, ADA and the new token form a trading pair pool on Minswap.  
- Participants get LP tokens representing their share.

---

## Benefits of Minswap’s LBE Model

### Fair and Transparent Distribution  
- Prevents sniping and early insider access

### Community-Led Price Discovery  
- Token price is based on supply/demand during the event

### Instant Liquidity Post-LBE  
- Tokens are tradable immediately with deep initial liquidity

### Decentralised and Permissionless  
- Anyone can participate using a Cardano wallet

### Integration with Yield Farming  
After an LBE, the LP tokens can often be:

- Staked in farms to earn MIN rewards  
- Used in other DeFi strategies within the Cardano ecosystem


Lesson 1 - What is a Liquidity Bootstrapping Event?

Chapter 6 - Liquidity Bootstrapping Events

# What is Governance on Minswap?

Minswap is governed by its community through a Decentralised Autonomous Organisation (DAO) model, allowing token holders to propose, vote, and decide on key protocol changes and developments.

- The native token **$MIN** is used for voting.  
- Anyone holding $MIN can participate.  
- Voting is done on-chain for transparency and immutability.  

---

## How Minswap Governance Works

### Proposal Submission  
Community members can create and submit proposals (e.g., fee structure changes, new farming pools, treasury usage).  
Proposals are first discussed off-chain (e.g., Governance Forum) before going on-chain.

### Snapshot Voting  
Voting typically takes place via a snapshot mechanism based on wallet balances at a specific block.  
You vote using your $MIN tokens – the more you hold, the more weight your vote has.

### Execution  
If a proposal passes the required quorum and majority, it is implemented by the core team or via smart contract automation.

---

## Pros of Minswap Governance

| Benefit               | Description                                                              |
|-----------------------|--------------------------------------------------------------------------|
| Decentralisation      | Decisions are made by the community, not a centralised team              |
| Transparency          | Voting records and proposals are public and on-chain                     |
| Incentivised Participation | $MIN holders have a direct say in protocol direction             |
| Community Empowerment | Enables funding of community ideas via treasury proposals                |

---

## Cons and Challenges

| Challenge             | Description                                                              |
|-----------------------|--------------------------------------------------------------------------|
| Low Voter Turnout     | Many holders don’t participate, leading to low engagement                 |
| Whale Dominance       | Large holders can sway votes, reducing fair representation                |
| Voter Apathy          | Users may not fully understand complex proposals                          |
| Coordination Costs    | Requires strong community communication and infrastructure                |

---

## Real Governance Examples

- **Fee Distribution Changes**: Proposals to adjust how trading fees are shared between LPs, stakers, and the DAO.  
- **New Farm Listings**: Adding new yield farms and determining MIN reward allocation.  
- **Treasury Grants**: Funding community tools, dashboards, or audits.


Lesson 1 - What is Governance on Minswap?

Chapter 7 - Governance

# What is the Minswap Analytics Dashboard?

The Minswap Analytics Dashboard is a powerful tool integrated into the Minswap platform that provides users with real-time insights into:

- Liquidity pool performance  
- Trading volume  
- Token statistics  
- Yield farming metrics  
- MIN token economics  

It empowers users—especially liquidity providers and yield farmers—to make informed decisions based on data, not speculation.

---

## Key Features & Metrics

### Liquidity Pool Metrics

- **Total Liquidity (TVL)**: Shows how much value is locked in each pool  
- **24h Volume**: Tracks trading activity for the past 24 hours  
- **Fees Earned**: Displays trading fees generated, useful for LPs  
- **Token Prices**: Real-time prices based on pool ratios  

### Token Insights

- **Price Movements**: Historical and current token prices  
- **Top Traded Pairs**: Most active tokens and pairs  
- **Market Share**: Insights into how tokens are performing across the DEX  

### Farming Analytics

- **APR / APY**: Annualised rewards for farming different LP pairs  
- **Staking Metrics**: Number of stakers, rewards distributed  
- **Historical Yields**: Helps track changes in farm performance over time  

### User Portfolio View 

- Personalised view of your liquidity positions, earnings, and farming yields  
- Helps manage assets and track ROI over time


Lesson 1 - What is the Minswap Analytics Dashboard?

Chapter 8 - Analytics, Tools & Insights

# Staying Safe on Minswap

Decentralised Finance (DeFi) unlocks powerful tools like yield farming, token swaps, and staking without intermediaries—but with this freedom comes responsibility. Platforms like Minswap, while non-custodial and secure by design, still require users to practise caution and follow good security hygiene to avoid risks such as phishing, scams, and user error.

---

## Understand the Core Risks in DeFi

Before diving into best practices, it’s important to understand the types of risks in the DeFi space:

- **Phishing attacks**: Fake sites mimicking Minswap to steal funds  
- **Malicious smart contracts**: Tokens or dApps that exploit wallet permissions  
- **Human error**: Sending funds to wrong addresses, mismanaging keys  
- **Impersonation scams**: Fake support channels on X, Discord, or Telegram  

Minswap itself is audited and open-source, but no protocol can protect users from unsafe habits.

---

## Best Practices to Stay Safe on Minswap

### 1. Use a Hardware Wallet (e.g., Ledger or Trezor)  
Never store large amounts of ADA or tokens in hot wallets (e.g., Nami, Eternl).  
Hardware wallets keep private keys offline, making it nearly impossible for a hacker to access your funds.

### 2. Double Check URLs  
- Official site: https://minswap.org  
- Bookmark the site to avoid fake phishing URLs.  
- Never click links from unsolicited DMs or social media comments.

### 3. Manage Wallet Permissions  
- Check which dApps have access to your wallet using tools like CCVault’s collateral checker or your wallet’s token access settings.  
- Revoke access to tokens or contracts you no longer use.

### 4. Verify Token Contracts  
- When adding a new token to trade or farm, make sure it’s a verified token on Minswap or listed on CardanoCube or TapTools.  
- Avoid low-volume tokens unless you understand the project.

### 5. Be Skeptical of “Support” Accounts  
- Minswap will never DM you first on Discord, Telegram, or X.  
- Scammers often impersonate admins and offer to “help recover” funds or “upgrade” your wallet.  
- Always use the official community links from the Minswap website.

### 6. Record and Back Up Seed Phrases — Offline  
- Write down your wallet’s seed phrase and store it securely offline (preferably in two separate physical locations).  
- Never take a screenshot or store it on cloud storage.

### 7. Enable Spending Limits or Multisig Wallets (Advanced)  
- For larger portfolios, consider multi-signature wallets or use wallets with spending caps to limit risk exposure.

### 8. Watch Out for Fake Analytics or Airdrops  
- Only use official Minswap Analytics at https://analytics.minswap.org  
- Ignore messages or websites claiming to offer “MIN airdrops” or “staking rewards” via third-party platforms.

### 9. Don’t Rush. Always Review  
- Whether you’re farming, staking, or swapping tokens, double-check the transaction details in your wallet before signing.  
- Watch for suspicious fees or unknown token interactions.

---

## Safety Checklist

| Safety Tip                  | Status |
|----------------------------|--------|
| Using a hardware wallet    | ✅     |
| Bookmarked official sites  | ✅     |
| Wallet access reviewed     | ✅     |
| Offline backup of seed     | ✅     |
| Never clicked unsolicited links | ✅ |

---

Security in DeFi is a shared responsibility. While Minswap offers a secure and open-source platform, it’s up to you to maintain best practices to protect your funds.

When in doubt, ask in official community channels—but **never share your private key**.


Lesson 1

Chapter 9 - Security & Best Practises

This course is your hands-on guide to trading, providing liquidity, and using advanced DeFi tools on Minswap v2. Learn how to connect your wallet, place limit orders, manage slippage, and navigate Pro Mode with confidence.

By the end, you’ll be equipped to trade smarter, earn rewards, and participate in governance — all while staying secure on Cardano.

A comprehensive guide to decentralised finance using Minswap on Cardano.

Complete DeFi Guide to Minswap

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