Liquidity Providing
Providing liquidity for $BREAD makes it easier for people to swap in and out of the token, which matters for a currency meant to be spent. The problem is that doing it naively costs you your voice in governance.
Why LP Vaults exist
Section titled “Why LP Vaults exist”When you provide liquidity for $BREAD on a DeFi market, you receive LP tokens in return. By default, the Bread governance system can’t see those LP tokens — it only tracks $BREAD held directly in your wallet. This means liquidity providers would lose their voting power by moving $BREAD out of their wallet.
The LP Vaults solve this. By depositing your LP tokens into a vault, the governance system can include your $BREAD in its voting power calculations, as if you were holding it directly.
Your voting power is still calculated the same way — as an average over the previous month, with a one-month delay. See How it Works for the details.
How to get started
Section titled “How to get started”- Provide liquidity — add liquidity for $BREAD on the listed liquidity pool to receive LP tokens
- Stake your LP tokens — deposit them into the vault at app.breadchain.xyz/governance/lp-vaults
- Participate in governance — vote on the monthly distribution as normal
To withdraw, unstake your LP tokens from the vault and remove liquidity from the pool. Your $BREAD stops counting toward your voting power once it leaves the vault, subject to the same one-month averaging.
Things to know before you start
Section titled “Things to know before you start”Providing liquidity is not the same as holding $BREAD. You are exposed to the other asset in the pool and to impermanent loss, and pool fees vary. This is a DeFi position, not a savings account — understand the pool you are entering before you deposit.
Full guide
Section titled “Full guide”A complete walkthrough, with screenshots: Adding Liquidity to Breadchain — A Complete Guide
Questions? Ask in the Bread Cooperative Discord and tag a moderator.