RE: Splinterlands LP Farms and Season Rewards
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I eventually got myself into the DEC-BUSD pool because my DEC was just sitting around doing nothing. I've been waiting to save up a larger amount before I added more so I was interested to see that you are adding relatively small amounts at a time.
I think I need to watch the video again and maybe slow it down a bit as I'm still learning the LP stuff.
With regard impermanent loss it would only be a loss if I was attached to having DEC wouldn't it? What I lose in DEC I gain in BUSD. Is that correct?
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well, the way the impermanent loss could be bad is if the DEC vs BUSD goes down.
Say you put in 100 BUSD and that made you put in 100000 if the peg was 1000 DEC is 1 BUSD and then over time DEC peg drops to 1000 is only 0.8 BUSD. Then you need to look at this chart.
This is the rule for LP as your assets move you can lose money. Now the higher price part of this chart doesn't matter for DEC pair as it will never, in theory, go over 1000 to 1 BUSD by more than a little but still in that case as it goes up you lose a little bit because you would have been better just hold dec but you do gain money just not as much if you just held it.
I put a few arrows at around that lowest I see DEC for longer times 1000 equal .70 BUSD. That little area is you lost is only a few % points 5% at most I think but could be off by a little so if DEC fell down and you went to pull that same 200 dollars out you would only get %190 dollars and it would be more DEC and Less BUSD. Hope that helps a little.
Thanks for the extra information. I just can't get my head around this at all.
I think I'm just going to keep putting my DEC in the Farm and hoping it works out for the best. I didn't realise that I could end up with less than if I just hodl'd it. I thought it was just a question of which coin you ended up with that people were concerned about because they preferred one over the other.
Where does the value of CUB come into this given that that's what we are farming? Doesn't that help to write off any losses?
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Ya the other part of this is if the coin you are farming goes up more than any losses then you are winning and cub have been doing pretty good holding its value.