In this short post, I would like to share with you a few reasons why I like Diesel pools here on HIVE for providing liquidity! If you are not familiar with what they are, you should check this link https://tribaldex.com/dieselpools/... Now, there is another website that uses the same data, but it looks a bit more user-friendly and with some extra data at your disposal... It's https://beeswap.dcity.io/swap?pools... The screenshots that you will see inside this post are made from it...
created in Canva.com
So, back to Diesel pools... Why they are different than other Defi platforms out there, for example, Polycub? Firstly, anyone can create a pool if pays the fee... You don't have to ask for permission or pay some huge amounts of money to do that...
Secondly, there is no "STAKING" in Dieselpools... You just provide liquidity to the pool and that's it... Another important difference is that every pool has SEPARATE rewards that can be added by the pool creator, or any other person! There is no centralized (mining, or platform-native) token, and rewards can be in multiple tokens!
And thirdly, the thing that I wanted to highlight in this post is EXCHANGE FEEs! To explain how it works, I will show you my personal example... On the screenshots above, you can see my position in the SWAP.HIVE:DEC liquidity pool... I'm not an owner of that pool, I'm just one of the liquidity providers, and as you can see, one of the smaller ones as my percentage in the pool is only 0.443%. Also, you can see that I have 48799.444 "shares" in the pool, and that number changes when you add or remove liquidity...
Just to mention one important thing... Adding and removing liquidity don't have fees and you can do it whenever you want it... On the other side, if you SWAP tokens, there is a small fee for doing that, which is distributed among liquidity providers! Rewards are clearly stated on the Beeswap website when you check your pools, but FEEs are a bit more complicated to calculate... You can find FEEs on Tribaldex and calculate them manually, but there are no specific numbers for your provided liquidity...
In my example, you will notice that number of shares is the same as I didn't add or removed liquidity between 2 screenshots! Also, I have done the second screenshot after exactly 1 hour after the first one... So, there are a few price fluctuations inside, but not that much...
If you pay attention to the rights side of the image, you will see that my total worth of pooled assets is $2018.
After an hour, that number went up to $2047, which means that my "stake" is worth $29 more after just an hour (just a clarification... I did screenshots when the big announcement about DEC future peg was published)! As I said, part of that is fees that have been added to both pooled assets (in my case DEC and SWAP.HIVE), but also the price change of them... If you look closer, you will see that I have more HIVE and fewer DEC tokens, which means that DEC tokens went up more than HIVE...
To show you that things can go in another way around, I have made a third screenshot after over 6 hours... Price of HIVE went a bit down in the meantime, and DEC left less stable, but the total value in USD went down... That is a normal thing for liquidity pools and it's that "scary" thing called impermanent loss...
Even if I didn't add HIVE and DEC to the pool, HIVE price would go down and I would "lose value" in USD! By adding it to the pool, I have accumulated more HIVE and DEC in the meantime + earned additional rewards on top of it!
When I pick in which pool I want to invest, I'm trying to find the one where I can provide 2 assets that I want to accumulate! Two assets that I don't mind in which direction will go their price as I'm focused on accumulation! In that way, the impermanent loss doesn't matter at all!
This is not financial advice or such... It's just my way of doing investments in liquidity pools... Do your own research before making any decisions!
Thank you for your valuable time,
~ph~
If you want to support my witness, you can do it by voting for @ph1102.ctp here https://tribaldex.com/witnesses, or just scan the QR code down below...
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