Decided to add more liquidity to SWAP.HIVE:DEC pool on Tribaldex
Tribaldex pools are an easy way to swap our assets from one coin to another coin. During the initial days, I found it a little hard to understand how this would work. I noticed that people were adding liquidity to the pools and were getting some decent rewards for the same. The rewards were in the form of additional tokens on top of the liquidity itself.
I later found out that the liquidity providers get rewards in the form of the fees involved while swapping. I'm not sure how this works. But there is also a slippage while swapping for the users. In addition to that, there is also a difference between the pair we set initially and what is visible after a few months.
The above was my initial deposit to the liquidity pool. I added around 170 swaps.HIVE for 40000 DEC. I did not care to check what happened to this value. Today I was curious to go and check what happened to the liquidity I added earlier. Today I found out the below:
Looks like my inial SWAP.HIVE has changed from 170 SWAP.HIVE to 96 SWAP.HIVE and DEC have changed from 40,000 to 85,000. I saved a screenshot from my initial addition to making this comparison. From my previous screenshot, it is clear that DEC had better value back then against SWAP.HIVE. 1 SWAP.HIVE gave only 234 DEC. But today 1 SWAP.HIVE gives 883 DEC.
Comparing both my previous value and current value, it appears like I'm at a loss by adding my funds to the liquidity pool. I'm wondering if it is because the price of DEC is terrible right now or because the Hive price has also gone down since I invested in the pool. I don't really know how to calculate this.
I decided I will give it one more try by adding some more DEC to the liquidity pool and see how it goes. I anyways have decided to hold DEC for the long term. I'm also planning to accumulate a minimum of 1 million DEC in total. As a step towards that, I'm going to be pushing another half a million DEC inside the pool and see how it goes this time. This will also let me know if there is a good time and a bad time to add funds to the pool. Maybe I have to add funds only when the value is right. This has been a mystery for me.
I don't really know if people understood how pools work or if they are just blindly adding their token pairs inside the pool. 0.25% trading fees are really interesting but if the overall worth of the tokens we add inside the pool is going to go down, there is no point in getting the 0.25% trading fees. I'm also not sure how the 0.25% fund is given to us. I'm hoping it automatically adjusts to the liquidity we have added.
I have taken the above screenshot for my reference. Right now it says my overall worth is 733$ inside the pool. This can be a good start to compare and see how my liquidity is performing and if my asset value is really growing or degrading.
If you like what I'm doing on Hive, you can vote me as a witness with the links below.
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