Can someone please explain the relation between liquidity positions (pool

Question

Can someone please explain the relation between liquidity positions (pool

shares) and coin prices?

When coin price increases, supplied coin amount decreases and vice versa? But how?

Is this going to be a caveat when providing liquidity with coin prices going to the moon?

#blockchain #cryptocurrency #english #kava

0

01.12.2021

2 ответов

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TeslaBargain Bargain Автор вопроса

CryptoDaz (Darren)
Read up on 'impermanent loss'. Basically as users...

Very well, so there is no direct connection to the coin prices after all. So I guess there is nothing to worry about with the pools staying at 50/50 with the outcome of just minor fluctuations. As said, my goal is to provide liquidity in the long run, so I can only hope that I'm on the right track with my tactic.

0

02.12.2021

CryptoDaz (Darren) · Accepted Answer

CryptoDaz (Darren)

Read up on 'impermanent loss'. Basically as users sell one asset such as BNB for USDX, they are adding more BNB to the pool and removing USDX from it resulting in a lower USDX per BNB pool price If you had 5% of the whole pool your share will remains at 5% but now that 5% has more BNB and less USDX. In effect you are buying the BNB when another user sells BNB. The reverse occurs when USDX is swapped for the BNB

0

01.12.2021

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Can someone please explain the relation between liquidity positions (pool

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