Hive ecosystem is a wide platform which is not limited to blogging only but here you can invest in many ways. For example, investing in #hive coin and then after staking doing curation which will give you 11-13% APR profit. This is the huge profit which is far better then the banks.
Besides this, investing in #HBD and keeping in saving will provide you 15% APR. This is a safest investment way where your risk is minimum because HBD is a stable coin and it is supposed to stay at $1.
Internal market is another best option where you can do trading properly. For example converting hive to buy HBD and again converting HBD to hive. The good thing is here there is no trading fee for trader which is a big advantage.
In the same way there are many hive tokens in which investing is worthy. Among them the best option which I understood so far is investing in liquidity pool. This is an investment system where you have to make a pair of 2 tokens and provide liquidity for the traders.
On every transaction you will get profit. You can invest in any pair and add your investment in liquidity pool. As far as my idea and practical experience goes it is that investing in liquidity pool in swap.hive/Colony which gives 24% APR. Thats huge...
This is a very good profit if you stay consistent and think of long term investment planning. At least if you can hold for 3-5 years this investment can be useful. Along with capital gain you will also get APR profit on daily basis depending on the transactions.
If its profit is divided in a month then every month 2% profit will come on your total amount. This is its plus point but there are some negative sides which are very important to understand before investing.
What is impermanent loss in liquidity pool?
Remember that for any investment you should be ready for profit and loss. In investment or business both factors are always present. Where there is loss there is profit also.
I understand that in long term, if you hold then chance of loss is very low. But if it is a short term plan then here 50% loss chance is possible and that is impermanent loss.
What kind of loss is this? If for example #hive price falls and #colony stays stable then in this case #colony token will be sold and hive will be bought. This works like rebalancing. The token whose price falls will get more investment.
And if during this you want to withdraw from LP then in this case you will have to book impermanent loss. Because one token gave you loss that is your loss.
In the same way if both tokens crash then in this case there will be no impermanent loss and there will be no rebalance rather this is an actual loss. If during this you withdraw then huge loss can happen.
On the opposite side profit will also continue like this. If #Colony price rises then in this case investment will be taken out from colony and added in swap.hive. During this if you withdraw then you will get capital gain. And if both tokens price rises then you will get huge capital gain which is real profit for you (not impermanent).
I hope you got information about impermanent and actual loss. Have you invested in LP so far? In which pair and what APR is coming? Will be glad to see your answers in the comment section.
I hope you find this post useful and informative. If you do, please remember to reblog it so that it reaches as many people as possible and that they can benefit the most from it. Also, remember to upvote, which will help me financially and grow my account.
IMAGE TAKEN FROM CANVA Tribaldex
Thank You!
Best Wishes.