How to Add and Remove Liquidity on PancakeSwap for Four.meme tokens

Adding liquidity is one of the smartest ways to earn passive income from the tokens you already hold. If you’ve been playing around with Four.meme tokens and have a little extra BNB on the side, you can put both to work on PancakeSwap.

It’s simple, but there are a few key things you need to know before diving in.

Check out this YouTube video for a step by step guide on adding liquidity to PancakeSwap:

Before You Begin: Understand the Bonding Curve

Not all Four.meme tokens are immediately tradable on PancakeSwap. Some tokens are still on what’s called the bonding curve.

When a token is still on its bonding curve, transfers are restricted. You can buy or sell those tokens directly from Four.meme, but you can’t send them between wallets, and you definitely can’t add liquidity for them yet.

Once a token graduates from the bonding curve and officially lists on PancakeSwap, that’s when transfers open up. At that point, you can trade, add liquidity, or do anything else you’d normally do with a live token.

So, make sure the token you’re working with is listed on PancakeSwap first.

Head over to PancakeSwap.finance and connect your wallet. You can use any web3 wallet to connect to PancakeSwap. For BNB Chain, Metamask is a solid option.

Several wallet options are supported inluding Trust Wallet, Binance Wallet, OKX Wallet, and of course, Phantom Wallet. If you are using a mobile device ensure that you are using PancakeSwap via your preferred wallet's browser.

Navigate to the official Four.meme token website and select a token. Make sure the token you selected has already been listed on PancakeSwap, otherwise transfers will be locked.

Once again, verify that the Four.meme token has successfully bonded to Pancakeswap, otherwise transfers will be disabled and your liquidity transactions will fail.

Now, back on PancakeSwap, go to the Trade tab and buy a small amount of the token. Alternatively, you can also use the Four.meme website to buy a token, but ensure that it has already been listed on PancakeSwap.

Go ahead an confirm your transaction, it's recommended to test with a smaller amount of tokens first to ensure you are comfortable with properly adding liquidity.

In addition, you will need to acquire some WBNB in order to perform the liquidity addition. Remember,. you are adding WBNB + TOKENs to the pool, so you need to have both assets available in your wallet.

Now it's time for the fun part, adding your WBNB + Tokens as liquidity to the pool.

Click Add Liquidity.

There are several different options here. For the pools, there are several different options:

Infinity - This is similar to Uniswap V4, it offers some advaned features like hooks.

V3 - This one is comparable to Uniswap V3 and offers a unique pricing curve with customizeable pool fees.

V2 - This is again, similar to Uniswap V2 with a specific price curve, it's also one of the most popular on BNB chain and the option we will go with. Specifically, that's because the official Four.meme tokens bond onto PancakeSwap V2, so you want to add liquidity to the main pool to capitalize on all the volume, which means you should choose V2.

StableSwap - This is meant for Stablecoins and doesn't quite apply for us in this case,

Make sure to select the V2 option if you're adding liquidity for Four.meme tokens.

Enter how many tokens you want to add.

Choose how many tokens you want to add.

Keep in mind that you will need to have the equivalent amount in WBNB in order to add the liquidity.

So if you have $100 worth of tokens, you will need $100 worth of WBNB in order to successfully add your position.

Confirm the transaction.

You may also be prompted to add the Cake-LP token.

The Cake-LP token represents your liquidity position, and allows you to close our your position and remove the liquidity. This means if you transfer the Cake-LP tokens to another wallet, that other wallet will be able to manage and close out the liquidity.

You do not need to add the Cake-LP token to your wallet in order to remove liquidity, this is purely a UI convenience.

Once your transaction goes through, head over to DexScreener and paste your token’s contract address.
You’ll be able to see the liquidity you just added reflected under the pool’s transaction data.

If you ever want to pull your funds out, it’s just as easy as adding them. You can remove your liquidity position at any time, without any fees. The only fees you have to pay are the gas fees for transaction confirmation.

Find your liquidity position and notice the values next to it.

You may select how much of the liquidity position you'd like to remove.

Again, this ties into the Cake-LP token in the sense that depending on how much Cake-LP tokens you send, that allows you to partially close out your position. Again, very similar to Uniswap design. After all, PancakeSwap is a Uniswap clone.

Verify your liquidity amounts and positions and enable the Cake-LP token. This is essentially just sending out an approval transaction for your Cake-LP tokens to be spent by the PancakeSwap contract.

After approval, now click Remove to send the Cake-LP tokens to the PancakeSwap router and get back your WBNB + Tokens.

Wait for the transaciton to confirm.

And...

Congratulations, you are now a liquidity expert!

Verify your liquidity removal action on a supported platform like Dexscreener.

Adding liquidity to a popular token can be a great way to generate some extra fees, but it's also important to note some risks that come with adding liquidity to a token.

Notably, if a token's price drops significantly, your liquidity ratio for WBNB / TOKEN can get heavily skewed in an unfavorable direction. So when a token's price drops, instead of having a near even 50/50 split of WBNB and TOKENS, you might have a 30/70 split of WBNB and Tokens as your position. So when it comes time to remove the liquidity position, you end up with less overall funds.

Similarly, if a token's price rises significantly, you might end up with more WBNB than TOKENs in your liquidity position, missing out on some of the price rise. As such, adding liquidity is most optimal for a sideways trading market with high volume.

Moreover, the best way to capitalize on liquidity fees is owning the largest liquidity position on the market, which is what you get when you launch your own token. While Four.meme doesn't share quite as much of the liquidity fees with the creators, you can still launch a token on there to capitalize on the potential volume. Check out our step by step guide on How to Launch a Memecoin on Four.meme, and become a true degen by launching your first token!