Part 4/9:
To gauge success in your liquidity pools, several metrics come to play. Start by tracking earnings from fees and comparing them against the divergence loss. Let’s break down this example: if you earned $419 from liquidity fees but incurred a divergence loss of $135, you’d ultimately come out ahead with a profit of $284, highlighting the importance of net yields.
Calculating your profit margin on yield is essential as well. A profit margin of 67.7% suggests that you are effectively retaining a majority of your yields, while a negative comparison signifies potential issues worth revisiting.