RE: LeoThread 2025-08-12 13:38
You are viewing a single comment's thread:
The risk is impermanent loss.
I wrote about the risk of liquidity pools in my latest post.
https://peakd.com/hive-146620/@logen9f/how-to-earn-passive-income
0
0
0.000
Do that mean it’s best for someone providing liquidity if the assets stay close to each other in gains? Would it be bad for me to provide liquidity for hive/leo if Leo 10x’s from here?
Yes. I added liquidity in CENT:LEO pool before and I noticed that the LEO I put in was decreasing while CENT was increasing. When I removed it and swapped CENT for LEO, it still didn't cover the LEO I lost.
So what’s the point of providing liquidity if you inevitably end up with the weaker coin?
Get ready to pull out when you see it going against you. One advantage of LP is that it's much easier to withdraw. No waiting for days unlike staking.
Would it be smart for me to withdraw and reset often then?
Possible but you'll miss the reward payout for the day. Imo, it's better to track market prices and get ready to pullout.