Like he started with 475 USDT but went down to

Question

DeFiChain - International

R

Like he started with 475 USDT but went down to

456 USDT in 1 month so if he removes liquidity from this pair does that mean he lost 19 USDT?

#blockchain #cryptocurrency #defichain #english

0

05.05.2022

16 ответов

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Spencer L

No, you need to look at the value column. He actually lost $34.70. He lost some of his USDT and gained some DFI but the DFI has also went down in value slightly since then.

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05.05.2022

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Spencer L
No, you need to look at the value column. He actua...

Yeah saw that he gained around 4 DFI something But if DFI went up in price that’s a good thing right

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05.05.2022

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Spencer L
No, you need to look at the value column. He actua...

Yeah he lost $34.7 and he gained rewards of around $42 from his LM rewards

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05.05.2022

Spencer L

Yes but then some of the DFI will be converted to USDT, that is how impermanent loss works. And if USDT collapsed and fell to zero, because everyone would give the liquidity pool USDT and buy out all the DFI you will be left with tons of USDT but they have no value.

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05.05.2022

Spencer L

R
Yeah saw that he gained around 4 DFI something Bu...

So the only issue is if one of the assets you are liquidity mining goes really close to zero or goes really far up.

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05.05.2022

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Spencer L
Yes but then some of the DFI will be converted to ...

Oh god can that ever happen tho😳

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05.05.2022

Spencer L

R
Oh god can that ever happen tho😳

It is a potential risk, but if USDT went to zero crypto would pretty much be completely broken, all the arbitrage bots between exchanges will malfunction.

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05.05.2022

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Spencer L
It is a potential risk, but if USDT went to zero c...

Yeaah true that But I’m thinking if anyone has had sucha big loss doing LM

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05.05.2022

Spencer L

R
Oh god can that ever happen tho😳

And DUSD's failure is likely to cause extreme distrust in DeFiChain, so in either situation if one of the tokens is going to zero then there are bigger problems at hand.

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05.05.2022

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Spencer L
And DUSD's failure is likely to cause extreme dist...

Yeah so I guess that’s not really gonna happen

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05.05.2022

Spencer L

R
Yeaah true that But I’m thinking if anyone has ha...

Well say for example you have $1,000 invested in DFI and $1,000 in DFI-DUSD LP. Now imagine that tomorrow DFI goes up 256x. The DFI only investment reaches $256,000 but the LP investment will only reach $16,000. So big changes have huge problems for LMers, but if there are small changes over time rewards and DCAing will keep you ahead.

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05.05.2022

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Spencer L
Well say for example you have $1,000 invested in D...

Aaaaahh makes sense

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05.05.2022

vin

Spencer L
Well say for example you have $1,000 invested in D...

Prolly why it's best to stick with an LM pair over the long-term (a year or more).

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05.05.2022

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vin
Prolly why it's best to stick with an LM pair over...

Yeah long term is just best way to go

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05.05.2022

Spencer L

vin
Prolly why it's best to stick with an LM pair over...

Yep get consistent rewards over time + some of the changes in the price

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05.05.2022

Jess 🍰 · Accepted Answer

Jess 🍰

By transactions displayed in nominal rate, it looks like a lost of USDT, over time, the rewards paid out in DFI actually covers that, which aggregate into a better total value. Further than that, also need to consider the price of coin pairs changes, and use tools to distinguish impermanent loss vs value gained.

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05.05.2022

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Like he started with 475 USDT but went down to

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