I know you show this to any normie and their brain will melt.
APR is a big deal for many people, and to find numbers this high can only be found in crypto.
I have seen a lot of these farms but most of the time the high yield is short lived.
They attract a lot of people on their platform and wreck them when the values of everything goes down.
Thats the thing with farms, they try to pull you in with high yield, so people shut of their brains.
Only the sharpest tools in the shed can make maximum money in farms.
The way this works is you provide liquidity. Providing coins on both sides of the trade, and you earn a token for doing this. The amount you get paid depends what % of the farm is yours, thats the % of the rewards you get.
Now if you provide two tokens and the value of those tokens go down its a loss, if the token you are paid out goes down sharply in value too then you quickly realize you got yourself into a lot of trouble.
Above I am showing you the current PulseX V1 farms that pay out INC (incentive token)
Notice how the stable coin pairs have the highest yields, these are “safer” since at least half the coins you provide are stable at $1.
Now if let’s say you look at the USDC and PLS pair…. If the PLS price shoots up, you will have more USDC in your farm and less PLS, and if PLS price goes down a lot you will have more PLS in your pair and less USDC…
This is called impermanent loss.
Anyone who thinks impermanent loss is “not a big deal” is a noob who should be written off when the subject of the convo is liquidity providing.
Imagine hive for example, imagine you were able to provide hive/usdc as a pair.
If Hive price shoots up 50x you got REKT…. Your pair will have barely any hive, youll be stuck with USDC and if you wanted to get hive you have to pay 50x more… you should have just held hive and no stables during this 50x run. I hate it when people pretend they don’t care about money… this “kumbaya” mentality is not attractive to ANYONE… you will not onboard anyone pretending you don’t care about money… yes, hive is about community, but a rich community can blossom more than a bunch of hippies getting drunk around a fire…
Ideally if there was a stable coin/stable coin pair that was making high yield that would be a great pick right?
Well, that has its own unique risk, if one of your stable coins fails and goes to 0 then everyone will sell the failed one and buy the other one, leaving you with 0 good coins and all kinds of useless failed token.
Now, back to this pulsex picture I shared, remember how I said the INC token is the token that is paid out? Well what do you notice at the bottom?
There are 2 inc pairs. Is this bad? If INC is a reward token does that not mean it should be a forever dump token? Well, guess you never heard of CAKE…
in this case, INC is a leverage play on pls and plsx… which is why when pls and plsx goes up INC goes up more, and when pls and plsx goes down INC goes down more..
So, why is it good to pair INC with pls and plsx? Well… pls and plsx are primed to pump this bull market… I predict around May these coins will shoot past way over their ATH and start testing uncharted territory…
So what happens when you are paired against something that is going up?…. Well.. you should know right? LEO is paired to Hive, and Hive is paired with Bitcoin… notice how bitcoin has been going up? It is dragging hive up even though hive/btc price is actually performing poorly, the USD value of hive still captured some appreciation. LEO goes up even higher when hive makes moves…
This is why, I think if Hive and LEO can be wrapped and paired with Pulsechain then they too can realize some epic gains thanks to the pairings alone… I would say pair with ETH but with the ETH price and gas prices I don’t see how the little guy can use ETH anymore.
I really like talking about crypto with you guys. Tomorrow I have something special to share 😊 🦁