I have a few questions about Liquidity Pools. the

Question

I have a few questions about Liquidity Pools. the

concept is quite new to me
1. If I have, for example 100 USDX and $100 worth of SWP, would that 270% be applied to 100$ or the $200 total.
2. If the price of SWP changes drastically would I have to put in more SWP or more USDX to make sure the values remain even?
3. If I deposit a small amount of money now, like 20$ or $30 of each, can I add more at any time?

#blockchain #cryptocurrency #english #kava

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12.11.2021

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CryptoDaz (Darren) · Accepted Answer

I can confirm exacrtly what JS000001 has said is correct The yield is based on thje total value of your supplye (SWP+USDX), the pools automatically adjust themselves and you can add to our pool as often as you like. You might want to read up on 'impermanent loss' as if you asset changes in value significantly between supply and withdrawal it can reduce your profits, although the swap fees received and the high yields will likely to easily outweigh any impermanent loss in the longer term but for short term supplies of a few weeks there is a risk the rewards might not cover impermanent loss if the asset move in price considerably in those few weeks If you supply in multiple smaller deposits over time at differing token prices the price at which you can withdraw with zero impermanent loss is average out

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