Any explanation on how LP farming works on yokaiswap?

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Nervos Network

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Any explanation on how LP farming works on yokaiswap?

#cryptocurrency #english #nervos

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09.03.2022

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Matt Diamond

Chris (won’t message first)
Farms and Pools explained: Yokai swap essentially...

Is this about nervos network??

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09.03.2022

Chris (won’t message first) · Accepted Answer

Farms and Pools explained: Yokai swap essentially has 2 ways of earning 1.Pools 2.Farms Pools; are much more straight forward. You’re essentially putting one investment (YOK) into an interest pool and receiving passive income (YOK) under an APY (annual percentage yield) meaning it auto compounds. Simple stuff (the fiat value of your original investment is the main thing to keep an eye on; IE the price of YOK) Farms; a bit more complex. Ask yourself what your goal is. For most, it’s a route to accumulate more CKB, for others it’s as simple as a way to earn money. When your goal is figured out, the view on what to pay attention to becomes clearer; You are essentially splitting your investment in 2: half YOK, half CKB. Think of it this way; it’s the same concept as holding one coin, but now now there is risk involved because it is pegged to 2 coins. So ideally you want the values of each to move together to keep it straightforward. Now, just as before, you’re providing that investment to a pool of liquidity (money) in which you receive interest for. These are your “harvests.” Mind you, the farms use an APR (annual percentage return) meaning it does not auto compound. They leave that up to you. If you would like to do that yourself, you can. Now, impermanent loss can be a little complex. As I said before, you want both coins to move relatively the same. If the value of the coins gets far away from each other (one is going up while the other is going down) you can end up losing your originally invested CKB. But, I speak for my self when I say my goal is to earn more CKB. So when the price of YOK is rising, and CKB is staying flat or even going down, yes, the fiat value of your LP is decreasing, but that YOK you can harvest is now worth more to ultimately trade to more CKB. But for those wanting to simply earn fiat, they would have just been better off holding the one coin that performed better. This is why I asked you your goal. The goal is important to establish before hand. It’s all about how you play it. Some people like to harvest there YOK daily and convert it to CKB, while others let their YOK build through short term impermanent loss, in hopes that YOK will pump while CKB is down, for big trade off. Final point: risk exposure is entirely decided by the individual

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Any explanation on how LP farming works on yokaiswap?

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