If you are new to providing liquidity, it is recommended to start off with a small amount on a cheaper chain (Polygon, AVAX, Fantom etc.) so you can try out the process and make some mistakes initially. In this article, we will use Sushi on Polygon. It is also important to understand the basics of how an AMM works. Here is a great article from Binance: what is an automated-market-maker?

Step 1: Head over to https://app.sushi.com/add/ETH.

To access it from Sushi’s UI, click on the ‘Legacy’ → ‘Add’ buttons.

Step 2: Select the two tokens you want to use to add liquidity.

<aside> ⚠️ Make sure the dollar value of token A is close to the value of token B! (should be the case by default).

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In this example we will provide MATIC & USDC and add liquidity to the MATIC/USDC pair.

Step 3: If your tokens are interacting for the first time with Sushi, you will have to approve them first. You can learn more about token approval here.

Step 4: Once approved, you can now click the ‘Confirm Adding Liquidity’ → ‘Create Pool & Supply’ → ‘Confirm Supply’ buttons in the particular order to execute the transaction.

Congratulations, you have just provided liquidity! A new tab will appear at the bottom of the screen displaying your liquidity position. You can view all your liquidity position by clicking on ‘Legacy’ → ‘Pool’ at the top of the page UI or at: https://app.sushi.com/pool.

After adding liquidity, you will receive a SLP token which essentially is an IOU representing your liquidity position. You can stake it in the farm to earn extra Sushi rewards daily; you can learn more about farming here.