/biz/ - Business & Finance

>>30305618
Impermanent loss from acting as a liquidity provider is a bit complex and probably not something you want to just jump into with no prior understanding. You're basically providing two tokens in amounts dependent on their values relative to each other at the time you provide them. When you withdraw them, you don't get back the exact amounts you provided, but an amount that is again dependent on their relative values. Depending on how those values have changed in the time since you entered the pool, you could potentially have made much more money by simply holding the tokens.

If you do decide to go ahead, the tl;dr version is that you want to remove your liquidity while the values of the two tokens are as close as possible in relative value as they were when you provided them. Pic related.

>>29913162
Attempt to remove them and see what you'll get back. The value remains balanced so the exact token amount of each will change as their prices change. Their prices moving together is what you would want ideally, but you still gain if only one moons, that just results in some impermanent loss.

>>29855159
>Let's say I pick BNT/Link pool... How does this works?

YOU need to read up on impermanent loss first. Then read it again, and again.

Other protocol LP: swinging between euphoria and crushing depression during normal market moves. Always questioning himself. Might earn less than he put in, despite sacrificing his capital and time. Probably balding from stress. Other men pity him, women are turned off by his virgin gait. Has either a useless governance token or a fee token with an ROI so pathetic even a beggar pities him. Will host countless rugpulls to prop up demand, only has liquidity because he buys his own bags with bots.

Bancor LP: Always green, in his lane, moisturized, immune to any and all market movements, engaged with his community, attracts bizlets and women by his mere presence. Men seek his counsel, women desire his gaze upon them. Always keeps eye contact. Will fuck bad actors with a chimney sweeper. token has his back and provides him amazing ROI. Governance token acts as leverage, not afraid to put his money and his voice on the line, believes in true decentralized finance potential. Will suck up all the liquidity in the world, and more.

>>29772753
>>29772753

This image is unironically the best explanation of IL.

>>29414370
I do a little of both. Profit take here and there to buff up my other investments in my portfolio, compound the rest. It depends entirely on your investment strategy a but I prefer shaving off profits now and then AND keeping some coin. Similar to how I handled BAO, since I'm still holding some but already cashed out a portion to secure gains. Also this infograph shows IL risks. You ideally want two coins that follow each other relatively well. Not always possible, but BNB and EGG are closely correlated, thus the APY for that pool is less since the risks are less.

>>28892594
>>28892594
here you go

the prices of the two currencies you stake can fluctuate over time, which can lead to you losing or gaining one currency when you unstake.

depending on how much you personally value one currency over the other, the outcomes of your IL could be good or bad. For example, you might be happy to gain a lot of bao but lose ETH, if you would rather have BAO to farm with.

>>28337469
Here's the most retard friendly infograph around. In simplest terms, you're hedging one coming against the other. If one coin tanks, it'll eat up your good coin to offset. If one coin moons, it'll get eaten up by the bad coin to offset. Your gains will be less than if you just held but your losses will also be somewhat cushioned.

Considering we are in big bull market right now, I personally don't think it'd be wise to miss out on the huge momentum if either ETH or AVAX decided to randomly blast off to andromeda while leaving the other behind. You will still make profit btw, just not as much as if you just held, cause one coin will eat up some if the other to remain proportional to one another.