/biz/ - Business & Finance

>>19137692
To keep things simple, let’s imagine our liquidity provider supplies 1 ETH and 100 DAI to the Uniswap DAI exchange, giving them 1% of a liquidity pool which contains 100 ETH and 10,000 DAI. This implies a price of 1 ETH = 100 DAI. Still neglecting fees, let’s imagine that after some trading, the price has changed; 1 ETH is now worth 120 DAI. What is the new value of the liquidity provider’s stake? Plugging the numbers into the formulae above, we have:
eth_liquidity_pool = 91.2871
dai_liquidity_pool = 10954.4511
Since our liquidity provider has 1% of the liquidity tokens, this means they can now claim 0.9129 ETH and 109.54 DAI from the liquidity pool. But since DAI is approximately equivalent to USD, we might prefer to convert the entire amount into DAI to understand the overall impact of the price change. At the current price then, our liquidity is worth a total of 219.09 DAI. What if the liquidity provider had just held onto their original 1 ETH and 100 DAI? Well, now we can easily see that, at the new price, the total value would be 220 DAI. So our liquidity provider lost out by 0.91 DAI by providing liquidity to Uniswap instead of just holding onto their initial ETH and DAI.

Of course, if the price were to return to the same value as when the liquidity provider added their liquidity, this loss would disappear. For this reason, we can call it an impermanent loss. Using the equations above, we can derive a formula for the size of the impermanent loss in terms of the price ratio between when liquidity was supplied and now. We get the following:
impermanent_loss = 2 * sqrt(price_ratio) / (1+price_ratio) — 1 = F(u)CK-3thER3um

DEFI IS A SCAM

>>19138057
a 1.25x price change results in a 0.6% loss relative to HODL
a 1.50x price change results in a 2.0% loss relative to HODL
a 1.75x price change results in a 3.8% loss relative to HODL
a 2x price change results in a 5.7% loss relative to HODL
a 3x price change results in a 13.4% loss relative to HODL
a 4x price change results in a 20.0% loss relative to HODL
a 5x price change results in a 25.5% loss relative to HODL
N.B. The loss is the same whichever direction the price change occurs in (i.e. a doubling in price results in the same loss as a halving).

Bancor v2 will solve this

https://blog.bancor.network/beginners-guide-to-getting-rekt-by-impermanent-loss-7c9510cb2f22?source=collection_home---4------0-----------------------

the amount of liquidity you provide remains constant. So if the price of a token decreases to below what you originally paid (like if eth were to cut the price in half) if you withdrew your liquidity at that moment you would have less total value

>>19138215
> trusting bancor

you must be new on 4chan

> 4channel

ah wait..

>>19138374
I'm not new at all
I just wanna how anons feel about the upcoming changes to bancor
I know it's shit, doesn't mean there's no potential profits

unisawp is a scam

>>19138410
I see.

To me the red flag is that differently from SNX last year (whole new project from people genuinely into defi), bancor is an old fart of a project carried out by KNOWN SCAMMERS, that's enough for me to not delve into any detail on whatever they are plotting.

>>19138571
>KNOWN SCAMMERS
Care to give me some fud? I never really paid attention to bancor when it was shilled here, as the team was majority jews

>>19138410
I do acknowledge that current bnt market cap is low at 12m$ (token ATH 10$, current price 12 cents) and there might be a pump.
I just dislike those cunts with passion.

>>19138621
Well just referring to the heavy set of shilling and undelivered promises and marketselling on retail that the team did, they don't inspire me any trust at all. Might still be a good bet now that bnt price is low but I won't touch it.

>>19138410
btw that pic said feb was the absolute bottom (price 30 cents then, 20 cents now) and the even would have taken place in april; it's may and bancor is still irrelevant and has a bad name in the industry

>>19138057
Just look at this chart, it's not that difficult.
Only DAI/ETH is guaranteed to make profit for the long run.
Also you shouldn't measure your return in USD but in Gwei because everything is traded against ETH

uniswap is based, just don't provide liquidity with a big chunk of your stack on low market caps that have a chance to leave their range permanently

>>19138647
>>19138681
I see.

I feel the same way about McAfee, and I missed the gains on whatever he was shilling this month, dismissed it completely. I think we're dinosaurs. Newfags don't care that Bancor was shilled with false promises. They don't care that McAfee shilled utter garbage in 2018. In 2017 newfags didn't care that ETH broke its "code is law" meme about as soon it came into existence.

If there's suddenly a 100% ROI (from users voting it into reality) on staking BNT in the network, the price is gonna shoot up. And then shoot way down when people(the devs) start cashing out.

>>19138742
That is true, but the anon in the picture has a history of shooting his load a bit too early, his previous call (a "fundamental" play on DGD) was also way too early. I've been following BNT since and bought only very recently. Crypto has filthy rich & lazy devs, delays are to be expected, their latest blog posts promise next month.

>>19137692
uniswap is equivalent to a straddle
every trade moves the pyramid upwards because you earn fees.
It's not complicated at all.