Hi guys, I have a question regarding the "premium" I

Question

Hi guys, I have a question regarding the "premium" I

see on the farm side.
So from looking at the video of danku_r he shows how you can short farm, Long farm, and also stake your UST for a higher rewards balance, however he doesn't talk about the premium you pay when you buy the mAsset.
Does this change the numbers of APY?
If for example I can get a total of say 38% APY from this method, but the premium is say 8%, doesn't that mean that my APY goes down to 30%?...

#cryptocurrency #english #mirror.protocol

0

09.02.2022

12 ответов

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T J Автор вопроса

So Short is in oracle price, and Long is at premium? Meaning indeed I do lose those 8%? Meaning if for example I get 48% APY (4% a month), then to cover the premium I will need to be farming for at least 2 months? (4%X2) for a breakeven?

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09.02.2022

T J Автор вопроса

Well the thing is that I don't just hold the mAsset by itself, I create an LP with the mAsset and UST, meaning that even if the price of the mAsset changes in 50%, the impermanent loss won't be that big anyway. So the risk of the mAsset price isn't really there if I get that correctly. The LP kinda protects me in this case. mAsset - price goes down - more UST once I remove my liquidity.

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09.02.2022

sub zero

T J
Well the thing is that I don't just hold the mAsse...

i made a post on IL estimation a while back, maybe it helps - https://forum.mirror.finance/t/il-formula-massets/880/2?u=alagiz

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09.02.2022

T J Автор вопроса

GREAT ONE! I just realized that even on a pool with an asset and a stablecoin, if the asset goes down, you can lose money! I was sure that if the asset goes down you will simply have more stable, but this is not true because the asset worth less as well.... Too bad I didn't read this months ago, was fighting my thoughts for such a long time :) Thank you for sharing!

0

09.02.2022

sub zero

T J
GREAT ONE! I just realized that even on a pool wit...

thanks mate, glad it was helpful 👍

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09.02.2022

T J Автор вопроса

Yeah thanks! Just 1 more thing to clarify please. When I short farm, the mAssest is sold right? And I get the UST value after 2 weeks. 1. Do I get the UST value at the moment it was sold? or at the value after 2 weeks? 2. When I return the mAsset to get back my aUST, do I need to return the same amountof mAsset that was sold, or the value of the mAsset that was sold? For example: If I locked aUST and got 100 mAsset tokens worth $500, when I return the mAsset do I need to return 100 tokens (for whatever the price is), or do I need to return $500 worth of the mAsset? 3. If the answer to my second question is that I need to return 100 mAsset tokens (and the price doesn't matter), then I already have these tokens from buying them right after I got the UST after 2 weeks, and indeed the only thing that can effect me is if there is impermanent loss, and the token's price went up, so I now have less tokens to retunr (don't have the 100 anymore, but maybe 80 tokens).

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09.02.2022

Mayank Grover (Will never DM first or ask for funds)

T J
Yeah thanks! Just 1 more thing to clarify please. ...

1. After you short farm, shorted mAsset is sold immediately after opening short position and UST received from it is locked for 2 weeks. And you can claim locked UST after 2 weeks. 2. You have to return 100 mAsset to close your position, means you have to return the same quantity. 3. There is no impermanent loss in short farming but in long farming, there's impermanent loss.

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09.02.2022

T J Автор вопроса

Mayank Grover (Will never DM first or ask for funds)
1. After you short farm, shorted mAsset is sold im...

So if I had impermanent loss and instead of qty of 100 mAsset, I only got 80 back as price went up (when pulling my LP), which also means I got more UST in hand now, I will need to buy another 20 mAsset from my extra UST and return it and this will complete the 100 qty I need to return. Correct?

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09.02.2022

Mayank Grover (Will never DM first or ask for funds)

T J
So if I had impermanent loss and instead of qty of...

Yes

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09.02.2022

Mayank Grover (Will never DM first or ask for funds)

There will be impermanent loss in both the cases. You can use this calculator to calculate impermanent loss https://dailydefi.org/tools/impermanent-loss-calculator/

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09.02.2022

T J Автор вопроса

Mayank Grover (Will never DM first or ask for funds)
There will be impermanent loss in both the cases. ...

Impermanent loss yes, but I will end up with more than $200 I have started with.

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09.02.2022

Mayank Grover (Will never DM first or ask for funds) · Accepted Answer

Mayank Grover (Will never DM first or ask for funds)

T J
So Short is in oracle price, and Long is at premiu...

After you short farm mAsset which is done at oracle price, the shorted mAsset is sold at TerraSwap price which includes premium. Please read more in the documents docs.mirror.finance about short farming. In terms of long farming, it's like providing liquidity on the platform.

0

09.02.2022

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