Vex Vet enquiry on LP

in blurt •  3 years ago 

Fabio M Silva ask a question :
Quick question let’s say I deposit x ammount of VET and y ammount of VEX each totally 1k USD

So total deposit 2k

If the price tanks and the tokens devalue

When I remove from liquidity pool

Will I get the same 2k value back just in more tooens?

But around or close to the 2k value right

If the price tanks in half will I get half the value?

TMCCLARDY explains:

In a liquidity pool, you would be more focused on the amount of tokens rather than their usd equivalent

Some quick napkin math. I would put in 1token and 2token (equal usd weight). As fees accrue and I receive them over time, I could pull something like 1token (plus fees) and 2 token (plus fees). The amount of the tokens I would get in return are greater than what I put in depending on conversion rate. The usd value of those tokens at the time 🤷‍♂

Hope I didn't confuse you. Not the best explanation

Panta Rhei comment is :
Let us assume the VEX/VET Relation is 35 at the beginning of your Liquidity Pooling. lets further assume, that at the end of the Pooling the Ratio ist still 35. So you will receive the same amount of tokens, plus the pooling rewards. In this case, you have: No impermanent loss (because the ratio is the same), some gains in Volume of the coins (because of the rewards). But You have the same losses in realtion to USD as if you simply hodled the tokens.

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