> For the complete documentation index, see [llms.txt](https://docs.peapods.finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.peapods.finance/how-to-guides/how-to-farm-volatility.md).

# How to Farm Volatility

### Getting Started

Once you have acquired your **pTKN** (see [How to Wrap into a Pod](/how-to-guides/how-to-wrap-into-a-pod.md)), you can start **Volatility Farming** by providing liquidity (LP). Every LP position consists of **50% pTKN** and **50% Paired Asset**.<br>

### Step 1: Selecting Your Volatility Farming Position

1. Choose how much **pTKN** you want to provide as liquidity.
2. By default, the protocol will borrow an equal value of the **Paired Asset**, creating a **2x Leverage Factor (LF)**. This means your **debt matches the value of assets deposited**.

<figure><img src="https://3679785424-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FWWGuQ85FudSBhxhUZWcf%2Fuploads%2Fiu52jaRVmUhUewKwCLGo%2Fkzib53au.png?alt=media&amp;token=18946757-0cf5-448e-bc27-997396f673a8" alt=""><figcaption></figcaption></figure>

### Step 2 (Optional): Adjusting Leverage Settings

For more control over your position, you can adjust your **Leverage Factor (LF)** using the **Advanced Settings**:

* **1x LF (No Leverage)**: You provide an equal amount of **pTKN** and **Paired Asset**, with no borrowing involved.
* **1x - 2x LF**: The position is created using a mix of **depositing and borrowing** the **Paired Asset** to form the 50/50 LP which lowers the leverage factor and **reduces the liquidation price**.
* **>2x LF**: No **Paired Asset** deposit is required. Instead, excess **Paired Asset** is sent to your wallet. The position is opened at higher leverage factor and the debt value exceeds the value of your deposited assets, increasing **liquidation price**.

<figure><img src="https://3679785424-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FWWGuQ85FudSBhxhUZWcf%2Fuploads%2FcJFPI4M3soMMZEkCOOst%2Fimage.png?alt=media&amp;token=d0c00e89-f514-4e82-80fc-b2673c5116b9" alt=""><figcaption></figcaption></figure>

### Step 3: Reviewing Your Position

Once you've set your LP preferences, the protocol will generate a **summary** of the steps it will execute to create your position as well as a comprehensive Position Summary which can be found under the "Outcome" in the summary.

<figure><img src="https://3679785424-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FWWGuQ85FudSBhxhUZWcf%2Fuploads%2FX54jOrJJ1OU2FJRjZu7w%2Fimage.png?alt=media&amp;token=293f794c-54f6-457d-9838-0e8243d7d028" alt=""><figcaption></figcaption></figure>

#### The Comprehensive Position Summary Includes:

* **Loan-to-Value Ratio**
* **Liquidation Price**
* **Expected Yield & Expenses**
* **Projected APY**

Review these details carefully to ensure they align with your risk and yield objectives.

<figure><img src="https://3679785424-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FWWGuQ85FudSBhxhUZWcf%2Fuploads%2FabnrR5lP1VSEq0i9kDvs%2Fimage.png?alt=media&amp;token=f87b8000-00d9-44f6-87ee-523f0239495c" alt=""><figcaption></figcaption></figure>

### Step 4: Opening Your Volatility Farming Position

Once you're satisfied with your setup:

1. Click **"Deposit"** to confirm your Volatility Farming position.
2. Approve the transaction in your wallet.
3. Your LP position will be created, and you will start **earning yield** based on wrapping/unwrapping activity in the Pod.

You can monitor and adjust your position anytime through the Peapods **Dashboard** via the [**My Portfolio & Yields** page](https://beta.peapods.finance/me).