The Winning & Losing With Uniswap - A DEC Story
The uniswap mania continues with @splinterlands in-game reward token Dark Energy Crystals (DEC) now trading on Uniswap and to get the excitement going the Splinterlands team is giving away a bounty and releasing new features too. I've been a bit apprehensive about getting into the liquidity pool game simply because the gas fees are so high and profits can quickly be arbitraged away by eager investors with deeper pockets.
I've avoided the HIVE and LEO LP's and while LEO does provide you with a bounty to make it worth your time, I've still felt it wasn't a place I wanted to play in. The price appreciation on LEO has changed my mind now and missing out on those gains does make me feel a little FOMO so I'll admit this could be the reason why I've looked at DEC as a second chance.
I recently jumped into the Splinterlands DEC LP pool on Uniswap and now that I have the first-hand experience I think sharing it will help a lot of players. Splinterlands appeals to a lot of players that are micro investors, and they see this opportunity and think they can jump in, and it's not always worthwhile.
While the frenzy of gains might attract some, I thought I'd give a more pragmatic approach to jumping into liquidity pools and why I decided on DEC/ETH.
Fees, fees and more fees
Since I didn't have any spare crypto with all mine locked up in various mechanisms I had to buy some, I purchased some ETH for the one side of the liquidity pool and then purchased some Litecoin to buy DEC.
I naturally had to pay fees on
1 - transfer money from my bank to a crypto exchange
2 - Buying ETH with my fiat
3 - Sending ETH to Metamask (exchange fees + Gas fees)
4 - Fees on buying Litecoin
5 - Fees on the on-chain transfer of LTC
6 - Fees on transfer into HIVE-Engine
Then I had to trade my Swap.LTC for Swap.HIVE
8 - Then I would have some slippage buying HIVE
9 - Then I had to pay to 1000 DEC to transfer my coins to Metamask
10 - Gas Fees to approve the liquidity pool
So If you're not doing at least $200 - $300 on each side, you're probably going to be left with near nothing by the time you get to the LP with all those fees.
I do think that this is a major stumbling block in general and I wouldn't mind all the fees if it were smaller, but they all eat into your principle pretty aggressively if you're making micro trades.
So if you're losing about $25 - $40 or so on fees, you better make it worth your time.
Note: Remember, if you're paying all those fees to get in, you could effectively double it because you'll have to pay something similar to get out eventually.
The fees tend to drive users to keep their liquidity in longer because they first need to break even in their returns before they can make a profit. Then they still need to earn enough to cover the fees you will have to remove your liquidity later on, so this can sometimes be.
How you could cover your fee loss
If you're losing let's say easily $100 in fees, how can you ensure that you recoup your investment and scrape out a healthy profit?
Time in the market
The longer you leave your coins in the liquidity pool, the more you can earn in fees off the daily trading each day. A month may be long enough to earn back your fees depending on how large your percentage of the liquidity pool is, but most may have to keep it a little longer than that.
Time in the market, you need to assume that there will be a lot of trading of the coin back and forth on the exchange as the more daily volume going through this pair, the more you can earn in fees.
Price appreciation
The two assets you providing have a price you bought in at, and this was one of the reasons I jumped in DEC, is pretty cheap so you could pick up several thousand tokens for a few bucks.
I left some of the tokens on HIVE Engine to arbitrage and what you have top hope for is the increase in trading increases the price of DEC, the way it's done for LEO, by the increase in demand for trading.
If the price increases, you can sell into that demand and cover your fees so you LP returns are all profit.
Bounty
Splinterlands is offering a bounty the same way LEO has, but they are giving away digital land a new NFT that they will be launching in the game. You stand a chance of winning your share of $60 000 worth of digital land, which is a pretty enticing offering and one of the reasons I jumped in to supply liquidity.
Looking at the way packs are bought up on Splinterlands, I think the land will sell like hotcakes, and the presale prices won't last long, so if you can pick up land cheap in the beginning, you could really make a good return.
If you do get an allocation of the bounty, it will go a long way to put you in the black and maintain your profitability.
Asset income
Digital land will probably mimic the properties of physical land and can be an income-generating asset. This remains to be seen but I assume holding land is not only about trading it but developing it and allowing it to earn you more DEC in-game, this could be another way to offset the fees and increase your profits over time.
An opportunity for guilds
As I mentioned a lot of players of Splinterlands are micro-investors but may want to get into this opportunity, but since it's not that affordable for everyone, I think group LP's could be an option if we take a look at what @spinvest's has down with its SPEW program, grouping investments to offset fee costs.
I think guilds will do well to copy this strategy and offer some incentives to guide members who offer up their tokens.
Have your say
What do you good people of HIVE think?
So have at it my Jessies! If you don't have something to comment, comment "I am a Jessie."
Let's connect
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Posted Using LeoFinance Beta
Yeah man I’m with you there. I think it’s cool press but I’m not going to bother with getting into swaps. The gas fees are bogus in this day and age. If Ethereum upgrades and eliminates the fees I would do it but that won’t happen for years so I’m good.
Thanks for taking a financial hit to explore it lol
LOL the moment I got into it I knew I'd be losing money but I wanted to give it a shot, hopefully, this post helps reduce my losses. I think too many people are cashing the gold and not doing the math especially if you're going to try and play the market with these fees you need to either bet big or know your story. Pretty sure tons of bad trades are going on and ETH miners are loving it
Oh for sure the dudes validating the Eth blocks are stoked right now that there’s all kinds of craze around this stuff.
We have free transactions over here folks, check it out!
Lol totally like why chase the gold when you sell the shovels! It almost makes me want to buy 32 ETH and wait for staking and let this craze pay me a yield
I think that as more chains get into the DE-FI procing on fees will go down as traders chase yield but that will take some time
Stay in longer for profit situation. I just wish those ETH fees were reasonable, it just makes me a spectator.
Totally I mean who has $400 or so to try an invest in something like this? It really puts a dumper and some people don't do their homework and end up losing money. Whats also unreasonable is how hard Splinterlands has become its taking so long to win 5 battles it hardly seems worth it for the rewards anymore
I happened to get on board Splinterlands when it is difficult, I wish I had got in earlier.
Lol then I guess it’s all about perception because I know what it was luck it sucks noe you have to spend so much time to win 5 matches it seems like such a waste
What is a good price to sell Leo on Hive Engine. Often the pump settles down to a lower price. Are we seeing an ATH or it may go way higher.
I’m actually not too concerned with the price of LEO while I do stake most of it I sell a small amount every day just as a hedge against the price! I think it should hit around $0.50 and settle there but I do think before then it can hit $1 mayb more
I think averaging out is important but I am doing what I did when it was 3 cents and staking as much as I can and ensuring I get more of those rewards in the future! Even if it settles at the price it is now a 7x gain is far more than I could ask for
You seem to be sorted with what/how much you really want from the crypto trades. I like that approach.
I’ve been burned enough in the paste to learn tbag you have to try and ride the waves and not get caught up in the price moving one way or another but stick to a plan that brings you small consistent profits
I've seen you play Splinterlands. What's your CP there ?
What do you mean by CP?
Collection Power.
347000 I think if I’m looking at the right figure
That's big enough. I had written a post for beginners. But you are definitely not a beginner in the game.
I am also thinking about adding to the DEC/ETH pool but still miss the ETH.
Lol yeah having to buy an equal amount of money each mans extra transactions and more fees! It’s not for the faint hearted but I do hope to break even
Have to admit, I have no idea about the swap thing as to me, it's pretty technical and 10 steps to lose money on fees just to get there for someone like me is no-go. I am going to dip my toes in a bit more with all these other tokens though and see what's going on there. The path has been set by LEO and if there is a dedicated music token (there used to be Sonic Groove) then could be swayed!
Thanks for being the guinea pig! Hope you get some more digital real estate from it!
Posted Using LeoFinance Beta
It’s pretty simple really you supplying tokens on each side of the trade so that when people buy and sell that were are coins to back up those buy and sell orders, that’s the basics of how it works
As for getting in its complicated and expensive AF, even this post won’t cover my fees lol! But hey we didn’t get into crypto to not take risks but I like do to these things to cut through the bullshit
There’s so much shilling and DJ khaled hype and no one tells you exactly what you getting into so while I did lose like 60 bucks It might stop someone else who is thinking about it or making someone think about his position sizing before getting in
Hi,
You once told me you use rwqarding.app. I am presently having issue with the settings. While I've set it to the best of my known. It's still bringing out a voting power error.
...
The error message I am getting
Don't forget that in the midst of this, the account is still voting some accounts which makes me wonder how, if the VP is low,why voting one and leaving the other.
I'll be glad if you can help out.
Are you sure it was me? I’ve never used the reward app ever on any of my posts lol
Ouch.
My bad then.
Thanks
I just wish there was a similar swappything with EOS. These crazy fees on Eth kind of defeat the purpose of it being a crypto currency. Feels more like a traditional banking
If you’re looking for affordable liquidity pools with very little fees I would suggest Using just.swap instead which is built on tron it’s stupid cheap to use and if you stake a few 1000 TRON you can actually do transactions from free and use your energy which is an allowance they give you when you stake TRON
Cheers, I must look into that although Tron has left a bit of a bad taste in my mouth.
!ENGAGE10
ENGAGEtokens.Thanks !
To invest in group is One key. We do so in Other markets.
Will try to go in to this too - love bounties.
Do you know why hive-engine show total value of Only Free tokens (not staked)??
I can not understand why...
I thought I have 160 usd in tokens because hiveengine told so. But then I see it was double because all staked...
/ The man with no control of his tokens...
If you find a group that is going to get into the LP and accepts DEC contributions please tag me in the post I’d like to get I involved
Lol no clue you’ll have to ask aggy why they do that I haven’t found a tool that calculates your full HE token balance yet
Will do 😉
The fees pretty much make Ethereum into a joke unless you are a whale. I personally don't bother with it also because I assume ETH will be worth more in the future so in a relative way they are even more expensive than what they are right now.
It's one of the things I love about Hive/EOS/TRON. instant transactions no fees.
I also think it’s dumb but hey if people want to use it by all means I think what’s dumb is other cheaper chains not jumping on this and stealing users who are clearly keen to support DE-FI
Tron is trying but they wash trading and being scammy AF I’m jusy hoping other chains and projects get their act together
Well we hope the DEC will grown up a lot, i get a little too for be trading and arbitrage, only in hive engine but it was posible i hope recover in this three months, i do not get the land i will only hope get good profit in the future.
Have a great day.
and thanks a lot for building the way for us, i really see that the cost for enter it is very hignt.
Posted Using LeoFinance Beta
I do hope so too if DEC increased in price I may be able to pull back some of the fee cost abd make some profit but who knows with so much being minted they may be able to keep the price down
It’s a pleasure and glad I could help educate people on the cost of LPs and how to get in if you want to make a good fgo of it
Posted on twitter
I pretty much have the DEC to buy a land zone at discount (15% off after the 50% presale discount) and bought it before it took off. Frankly I don't want to venture into the land of fees only to discover in the end I won't have enough DEC to buy the land zone. There's also impermanent loss to consider, and there's no way to know if you'll end up with less ETH or less DEC.
Absolutely I didn’t mention the impermanent losses but that’s a very good point! I fully expect to lose money on this trade it requires too much of an upside to break up even
I considered dipping my toes in DEC pool and becoming an LP, especially because I had DEC, but I didn't because the risks of not having 850k DEC at the presale time were too high for me given all variables.
To swap or not yo swap that’s the question
Lol sometimes swaps can be sneaky so be careful
Thanks for sharing! - @rehan12
The fees are restricting ETH to see it's heights hopefully that will resolve soon. While hopefully the land will add a new value to the eco-system of the game. All the best for your ROI on teh investment in the pool.
yeah if you want to make the most of it you actually need to time the market and look at when gas fees are the lowest but who has time for that? lol I do hope the land does provide more value I'm so keen to see how it will be used in the game