Splinter-caking?! Pancakeswap: How to earn? Part 2

In my previous blog, I mentioned about how you can withdraw your DEC and SPS assets from Splinterland to BSC and swap to any other tokens in BSC through Pancakeswap. Here is the link to the Part 1:
https://leofinance.io/@namelessnameless/splinter-caking-a-simple-introductory-to-pancakeswap-part-1

For this part 2, I will tell you what else can we do with pancakeswap and EVEN EARN from it.
Website: https://pancakeswap.finance/

pcs1.png
As you can see, I do have earnings in pancakeswap. Before we explore a bit more, I like to highlight that pancakeswap has a native token that is called cake. The price and icon of the cake token is actually shown on the top right of the website. Currently, cake is worth $18.571.

As cake is the native token, later you will see how this cake token can be used to help you EARN or generate passive income.

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Under the "Earn" tab, click on the "Pools". You will arrive at the Syrup Pools.

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As you can see, if you have cake tokens, you can actually stake your cake tokens here to generate 72% APY. Do take note that APY is not fixed. As more people stake or the vote to reduce cake emission, these will affect the APY.

For first timer,
pcs4.png
when you click on the details, you will need to enable the pool by signing a contract from your Metamask before you can deposit any cake tokens for staking.

After you get approved, you will see what I am experiencing.
pcs5.png
As you can see, I have deposited about 150 cakes which is worth about 2800USD. And they will give you live updates that so far I have gained about 1.12520cakes which is worth about $21USD and this will be automatically added into my pool to auto-compound. So there is no need for you to claim or stake like Splinterlands SPS.

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Do take note that there is a unstaking fee of 0.1% if you unstake within 3 days of staking.

For now, you can even use cake to get SPS! Do take note that there is a time limit for this pool. You can click on the clock icon to see how many more days this pool is available for you to stake cake and earn SPS.
pcs7.png

Next I would also like to bring you to "Farm" under "Earn" tab.
pcs8.png
This is the place for you if you provide any liquidity pools(LP) in pancakeswap. In simple, providing liquidity pool means you are "staking" a pair of 2 tokens in equal value for people to do token swap. As a result, you can gain exchange fees and bonus. Farm is the place where it tells you what bonus you can get from providing LP.

pcs9.png

I can go more indepth if the reader is interested to know on how to provide LP. Currently, I have spare BNB and SPS, so I ended up provide LP for this pair of tokens. As a result, I am even able to earn cake tokens. The APY is currently at 87.36%.

However, do take note of the risk of impairment losses if you are providing LP.

I hope this blog will help readers to understand more about Defi Swap and even know a trick or 2 to get passive incomes. I have more and more requests on what are the different ways of generating crypto passive incomes do I have. I do have more than 20 different sources of generating crypto passive "income" at this point and may take a while to go through all.

Posted Using LeoFinance Beta



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Why don't you add liquidity in the Busd:dec pair? I think it is more profitable than doing it bnb:sps.

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Cause i got spare bnb and sps so i am looking for such a pair.

As for DEC, I did put the DEC:SPS pair in tribaldex, as they are counted for the airdrop point.

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Ah ok, but I guess because of the big price drop that has occurred these days, you must have a pretty significant impermanent loss in those pools right?

I added liquidity in the Dec:Busd pair in pancakeswap to not be so exposed to impermanent loss and I think it has worked so far, ahhh and it also counts for airdrop points.

I added liquidity in the Dec:Busd pair in pancakeswap to not be so exposed to impermanent loss and I think it has worked so far, ahhh and it also counts for airdrop points.

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If price drop, that is value loss.

Impairment losses are referring when the pair ratio go off. For example, when one token rise 100% and the other tokens rise 10%, you will realise that you end up with more of the 2nd tokens and no longer 50% token 1 and 50% tokens 2. If you have kept the tokens, you will have more values, the different from holding the tokens and the changes in the tokens amt due to lp is called the impairment loss.

If you provide lp with one of them being the stable coin, you will face impairment losses when the token rise or fall in value as the ratio is off.

So when providing LP with pairing to stablecoin, you need to believe that the token is stable in value for the long term, if it rise too much, your impairment has been very huge.

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Yes, I know, but by providing liquidity with a volatile token pair, you are more exposed to market variations and that is what I am referring to, while doing it with a stable currency decreases that risk a bit.

I understand that you provided liquidity with SPS because it is a great bet on the future, I also believe it will increase in value in the medium term.

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(Edited)

I understand what you are trying to say, but impairment loss is not about price movement but it is about the ratio going off. By having a USD pair LP, you have higher risk of impairment loss.

For example, you put in 50% of token A and 50% of token B.
If token A double in value while token B remain the same(stable coin), you may suffer 25% or so impairment loss(even tho neither of the token fall in price).

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Of course, the idea is to reduce the risk, we know that Dec has a parity of 1000 dec = 1 dollar and right now it is not being fulfilled, there is an inflation x10 and in the future Dec will return to its original price because the Splinterlands has a mechanism to carry it out but it has not been so efficient because everyone keeps them and on the other hand we have SPS that due to the rewards of the Airdrop will surely be lowering its price until it ends or they say an important news regarding it.

Knowing the above, I personally went for the Dec:Busd pair to reduce the risk because both dec and sps have a bearish trend in the short and medium term.

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In simple,
pairing with a stablecoin

  1. Reduce volatile risk(only 1 coin has price movement)
  2. Increase impairment loss(easy for the ratio to go off)

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