Adding liquidity to emerging assets like PSTAKE on Layer-2 chains is a smart way for DeFi users to earn yield while supporting ecosystem growth. With PSTAKE now available on Base Chain, Ethereum’s efficient Layer-2 solution developed by Coinbase, users can enjoy faster transactions and significantly lower fees when interacting with decentralized protocols.
This comprehensive guide walks you through the entire process of adding PSTAKE liquidity on Aerodrome Finance—one of Base’s leading decentralized exchanges leveraging concentrated liquidity models. Whether you're new to DeFi or an experienced liquidity provider, this step-by-step walkthrough ensures a smooth experience.
Why Add PSTAKE Liquidity on Base?
Before diving into the technical steps, it's important to understand why adding liquidity to the PSTAKE/USDC pool on Aerodrome makes sense:
- Low-Cost Transactions: Base Chain offers drastically reduced gas fees compared to Ethereum mainnet.
- Capital Efficiency: Aerodrome uses Uniswap’s concentrated liquidity model (CL), allowing LPs to allocate capital within custom price ranges for higher returns.
- Yield Opportunities: By providing liquidity and staking your LP tokens, you can earn trading fees and potentially additional incentives.
- Growing Ecosystem: As more projects deploy on Base, early participation in liquidity pools can offer long-term advantages.
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Prerequisites: Prepare Your Assets
To add PSTAKE liquidity on Aerodrome, you’ll need:
- A Web3 wallet (e.g., MetaMask) connected to the Base network.
- PSTAKE tokens on Base Chain.
- USDC on Base Chain (for creating a balanced LP position).
If you currently hold PSTAKE on Ethereum, you’ll need to bridge it to Base Chain using a cross-chain bridge such as the official Base Bridge or supported third-party solutions. Similarly, ensure you have sufficient USDC on Base—this can be bridged or swapped directly via Aerodrome if needed.
Step 1: Connect Your Wallet to Aerodrome Finance
Begin by visiting the official platform:
- Go to aerodrome.finance and click “Connect Wallet” in the top-right corner.
- Choose your wallet provider (e.g., MetaMask browser extension).
- Follow the prompts in your wallet to approve the connection.
Once connected, you’ll see your wallet address displayed, confirming successful integration with the dApp.
✅ Tip: Always double-check the URL to avoid phishing sites. Only use trusted domains.
Adding Liquidity to the CL200-PSTAKE/USDC Pool
Aerodrome supports Concentrated Liquidity (CL) pools, inspired by Uniswap V3. These allow liquidity providers to focus their capital within specific price ranges, increasing capital efficiency and potential fee earnings.
Step 1: Navigate to the Liquidity Pool
- From the dashboard, go to “Liquidity” > “Pools”.
- Search for PSTAKE in the search bar.
- Select the CL200-PSTAKE/USDC pool.
- Click “New Deposit”.
You’ll be taken to the deposit interface where you can configure your liquidity parameters.
Step 2: Configure Price Range and Deposit Amount
The next screen allows you to:
Set a price range (Box A): This defines the boundaries in which your liquidity will be active. The default uses tick intervals of ±2%, but you can adjust this manually based on market expectations.
For stable pairs like PSTAKE/USDC, a tighter range may suffice unless high volatility is expected.
- Enter deposit amount (Box B): Input either PSTAKE or USDC amount; the other field auto-fills based on current market price and your selected range.
Step 3: Approve Token Spending
Before depositing, you must grant Aerodrome permission to use your tokens:
- Click “Allow PSTAKE” and confirm the transaction in your wallet.
- Repeat for USDC by clicking “Allow USDC” and confirming.
These approvals are required only once per token unless you reset allowances.
Step 4: Deposit and Stake Your Liquidity
After approvals:
- Click “Deposit” and confirm the final transaction.
- Once confirmed, your liquidity is added to the pool.
To start earning rewards:
- Click “Stake Deposit”
- Approve access and confirm staking
Your LP tokens are now staked, and you begin accumulating fees from trades within your price range.
👉 Learn how top DeFi strategies are boosting yields across Layer-2 networks.
Adding Liquidity to the vAMM-PSTAKE/USDC Pool
For users who prefer simplicity over precision, Aerodrome also offers a volatile AMM (vAMM) version of the PSTAKE/USDC pool. Unlike concentrated liquidity, vAMM uses a traditional constant product formula (x × y = k), meaning:
- No need to set price ranges
- Liquidity is spread across all prices
- Lower capital efficiency but less management overhead
Step 1: Select the vAMM-PSTAKE/USDC Pool
From the Liquidity section:
- Search for PSTAKE
- Choose the vAMM-PSTAKE/USDC pool
- Click “New Deposit”
Step 2: Add Tokens and Confirm
- Enter the amount of PSTAKE or USDC you’d like to deposit
- The second token amount will auto-populate
- Approve spending for both tokens (Allow PSTAKE, then Allow USDC)
- Click “Deposit” and confirm in your wallet
Finally, stake your LP tokens as described earlier to earn rewards.
Frequently Asked Questions (FAQ)
Q: What is PSTAKE?
A: PSTAKE is a liquid staking token issued by pSTAKE Finance, representing staked assets like ATOM or ETH. It allows users to earn staking rewards while retaining liquidity for use in DeFi.
Q: Do I need both PSTAKE and USDC to add liquidity?
A: Yes. Liquidity pools require two assets to maintain balance. You must deposit proportional amounts of both PSTAKE and USDC based on the current market price.
Q: Is concentrated liquidity riskier than traditional AMM?
A: It carries impermanent loss risk, especially if prices move outside your set range. However, it offers higher capital efficiency and potentially greater returns for active management.
Q: Can I withdraw my liquidity at any time?
A: Yes. You can remove your position anytime through the Liquidity section. Note that unstaking may involve separate steps if your LP tokens are staked.
Q: Are there rewards beyond trading fees?
A: Currently, rewards come from trading fees. However, some pools may receive incentive programs—check Aerodrome’s announcements for updates.
Q: How do I track my LP performance?
A: Use the “Positions” tab under Liquidity to view fees earned, current value, and impermanent loss metrics.
About pSTAKE Finance
pSTAKE Finance is a multichain liquid staking protocol backed by Binance Labs. It enables users to securely stake leading Proof-of-Stake assets like ATOM and ETH and receive stkTokens—their liquid staking derivatives.
These stkTokens can be used across DeFi protocols to generate yield through lending, borrowing, and liquidity provision. Thanks to low fees and deep integrations with major DeFi ecosystems, pSTAKE delivers some of the highest sustainable yields in the market.
Its unique stake delegation strategy enhances network decentralization using an intelligent algorithm that analyzes on-chain data to distribute stakes across validators.
Final Tips for Success
- Monitor price movements if using concentrated liquidity.
- Rebalance your range periodically to stay in optimal zones.
- Use trusted tools and verify contract addresses before interacting.
- Keep small test amounts first when trying new pools.
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By following this guide, you’re now equipped to confidently add PSTAKE liquidity on Aerodrome Finance and participate in one of Base Chain’s growing DeFi opportunities. Stay informed, manage risks wisely, and make the most of cross-chain yield potential.