Mind the Fees !
For the last couple of weeks, I have been exploring Defi on other networks like Solana and Sui. I've learned a lot of things and I would like to share also some experiences that were not that positive...
Dealing with transaction fees...
Coming from hive, I'm used to have no fees for transactions. For people who never left hive, you probably don't know how amazing this is. The fees were the reason why I stopped dealing with chains like Ethereum or even Binance. Solana and Sui have much lower transaction fees but there are fees all the same and some fees that are quite surprising...
Testing out Defi
During my exploration, I have worked with many different defi platforms. I did some lending, invested in some vaults and provided liquidity into some pools. In most cases, things worked quite well but I had a very bad experience yesterday...
In order to understand things a bit better, I try out different platforms for providing liquidity. I started with Orca on Solana. When you create a position in a liquidity pool on Orca, you have the option to create a full range or a custom range position. You can decide whether you want to provide liquidity for all prices or just for a segment of the market. This gives a lot of flexibility which is great in my opinion. When you want to create the position, Orca shows you the fees and tells you that some of the fees will come back to you once the position is closed. Its a kind of rent fee.
source: Orca
The next platform I meddled with was Meteora. Their DLMM pools are a bit different. According to the number of bins, the pools are more or less concentrated. Again, when you want to create the position you see the fees that you will get back and the ones you won't get back.
source: Meteora
When I tested probably the biggest of the defi platforms on Solana Radiyum and their CLMM pools, I was surprised to see that the fee was pretty low with 0.01%.
source: Radiyum
When I created the position, there was suddenly a 0.15 SOL fee added and I thought it was the rent fee that Radiyum will pay back when closing the position... In crypto, you should never think things like that... I actually made the mistake to make the range of my liquidity longer than what is directly offered by Radyium. When you do that, it costs! A lot ! So for creating a position of about 25$, I paid a fee of 0.15 SOL worth 25$ again.
source: Solscan
Since I opened two positions and I did the same in both case, I lost 50$ on fees....
After testing these 3 platforms, I have to say that Orca is by far the best platform in my opinion. The fees are transparent and the flexibility is the best compared with the other platforms. On Meteora and Radyium increasing the size of the range you want to provide liquidity for can be very expensive and on Radyium you don't even see how much it will cost you!
Hope this will help you to avoid making the same mistakes ;-)
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Interesting information about other blockchain fees in their liquidity pools. Noted! Thanks for the info.
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Useful information if I ever want to try DeFi beyond Hive, which is unlikely.
It's only when we go outside that we realize how great it is to have zero fees on hive...
Same with my DeFi experiences, transaction fees can eat up a lot of the gains.
It's one thing if the platforms show the real fees but in this case it wasn't visible From now on I will pay much more attention what I confirm when I use my wallet lol.
Talking about fees, my biggest question about HIVE as Blockchain is how is it possibly to be sustainable without the fees... No makes sense to me...
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Hive has a different business model. Where other chains limit the circulating supply with fees, Hive has HBD and Hive stake and RC necessities that require staking :-)
Ok, but I am not sure if this is like Central Banks and printed money 🤑 or is about people buying HIVE as a invest... Sorry 😐
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What you say is strange. It hasn't happened to me so I'll look into it. It may be that in the chosen pool there is a remuneration coin that you don't own and that is the reason since Solana needs a reserve for each token that is in the wallet.
The reason was that I increased the range of my liquidity way above what is normally provided on Raydium. I checked with other orders that were with smaller range and they were with normal fees.
You've potentially saved lots of people here $50! 🤣
If one person doesn't do the same mistake then it's already good :-)
In the previous market, I was also working on the chain of ethereum, so we had to pay a lot of gas fees there, but now we have worked on this platform, so we do not have to pay fees here, and it is a matter of happiness for the users.
Big fees are never good :-)
On Meteora you get this compounded fee too if you extend the range past the 69 bins. You practically open multiple positions with adjacent ranges. Luckily I didn't have to learn this from my own experience, I saw that in a video.
Btw, I am currently on hold DLMMing, waiting for the price to get back up before I close my position either in range or close to it.
Yes but at least on meteora the UI tells you the fees. On Radyium I did the same mistake but the fee didn't seem to change and I didn't look through the wallet confirmation in detail... I also put my activity on hold. I don't think my position will get back in range anytime soon :-).
Mine either, lol. But I guess (hope?) we still have time.
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STOPI'm from that group that only handles Hive that you say at the beginning 😅 I hope to expand someday, but I find it interesting to know your experiences, even those of others who comment here. Happy to greet you brother, hope you are well ✌️
I like to explore other ecosystems just to realize how great we have it here on hive :-)
It sounds like a huge pain. I haven't done much outside of Hive lately, but I hope those pool positions work out for you in the long run. I guess it might take time for those liquidity fees to pay off the transaction fees, but at least you know what you need to do in the future.
Since I use very small amounts of money for the moment, it's rather an exploration than real investment. I try to start small so that such things don't hurt too much :-)
https://x.com/lee19389/status/1892634235300712915
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