RE: 1M Hive swapped in the DEC/HIVE Diesel Pool
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What are the benefits to LP's who engage in the Diesel Pools?
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You are viewing a single comment's thread:
What are the benefits to LP's who engage in the Diesel Pools?
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Presently there are Zero... those benefitting are the people using the pool in particular the people doing arbitrage off of the money LP providers have put in there.
But they do have a goal to implement a reward/benefit system
I have been arbitraging too which got me very excited about the diesel pools. I would love to become an LP but without the rewards it would be irresponsible of me to give up benefits elsewhere.
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Are the any fees that get put back in the pool? Sometimes that can offset any losses on market movement for less volatile coins?
There is not... the way a pool of fee operates is fundamentally different than how diesel pools work. Diesel pools do not have LP tokens that you get when adding liquidity and lp tokens represent a portion of the pool and that can go up in value from what you input into the pool
Diesel pools are not able to put fee tokens back into the pool... so they have to think in a different way. I imagine their technical limitations produced the fee-less system of diesel pools and I bet they wanted to do a fee system but couldn't figure out a way to do it without eth/bsc type smart contracts and an lp token system that seems pretty complicated and took uniswap and others a lot of careful planning.
Therefore a system where pool creators decide their own reward mechanism seems more doable and easier given their system and hives ability to send feeless transactions as opposed to other chains where there is a burden of cost for transactions and you leave that burden to the end user
Wow thanks for taking time out of your day to respond in such detail. I'm just wondering why people put money into liquidity pools if they get picked off by arbitragers. I am guessing if you run a community based on a token, it makes sense for that token to have liqiudity so the community might decide to do it for the benefit of the community. But for SWAP.BTC its less clear.
So that brings me to that community spirit that must exist to support these pools for the greater good..I must say I'm surprised because greed is usually stronger driving force than altruism..but great to see how the whole hive community gets behind iniatives like this without any obvious direct benefit to them.
I am guessing that most of the liquidity specially for swap tokens comes from hive-engine company itself. Because otherwise I would be confused why they are adding liquidity... or perhaps the people doing arbitrage put liquidity there so they can benefit at higher amounts
I'm just scattering stuff around in small amounts to get accustomed to working in the environment, but I also kinda hope later down the road there'll be some kind of pay off develop as growth allows.
Same for all the Leofinance stuff. I don't really understand most of it, although I may have the beginnings of a basic understanding, but I'm dropping a few $$ around to feel it out.
I still check balances a thousand times a day, but I'm beginning to view this as an educational endeavor, rather than a money making scheme, and it's starting to present a new kind of reward system, in addition to the thrill and despair of market fluctuations.
Additionally, I trust the dev team here, and when they roll out something new I want to try to support it. This place is changing my life and I want to be a part of the process, even if it is in a small way.