Liquidity pool investment is the best choice for the hive users who are confused about where to invest. There are many hive users who wants to invest in different hive tokens but they are confused for one thing that whether we will get passive income from our investments?
This is absolute that every investor have similar thinking after their investment and that is how to start passiven income. For all those hive investors, LP is the best choice for them. You can invest in liquidity pool market for to earn passive income and also get capital gain.
Before investing, one thing to keep in mind that #liquditypool investment is not safe from risk. It have both profit and loss. You must learn and understand before accessing this investment place.
What is the profit in this investment? If you are long term investing, then you will be overall in profit. Let suppose, you have selected #Colony and #hive in the pair. We know that in long run, both of these tokens will rise in price.
This rise in price will help you get capital gain and also right now, this pair is the best one giving best APR (25%). Similarly, there are other different pairs, which offers different APR profits depending upon the pair and number of transactions.
Another way of profit is that if only your one token rises in price and other stays stable then in this case you will also be in profit. If both of your tokens are stable in price without any movement then still you are in profit because you are earning 25% APR profit as passive income.
If I talk about losses there are as well. Impermanent loss is the famous one here, how this happen? If one of your token is stable and the other one is going down then in this case, the token which is stable in its price will keep on selling and will buy the token which is continuously dipping. In this case, impermanent loss occurs.
Similarly, if both the tokens are dipping then this is the real loss. You must wait for recovery. These are the type of losses in LP, but if you are long term holder then there is nothing to worry because in long term they will recover back. The only advantage in case of profit and loss is the passive income that is (25% APR)
There are different pairs in the liquidity pool. Not all of these pairs offer same APR profit. You need to know about different APRs. How is this possible? First of all you need to list the best hive tokens which have good projects and their future growth chance is high.
Lets say, #hive, #Colony, #Script, #Leo, #Airkhawk, #Zing are my selections and I beleive they are the best tokens which have the potential to grow in future. Also they have strong usecase with solid projects. Also these tokens are the trending ones in the hive ecosystem.
Majority of the investors are interested in these tokens. Whenever more users are interested in any token then that one is the best choice for investment. Because any token whose volume is high and there are more transactions happened, then that pair needs more liqudiity. The more liquidity means more transactions will happen and the more transactions mean, more earnings for you.
I have compared many pairs regarding APR profits but I find the swap.hive:Colony among the best. Offering around 24-25% APR. This is huge and this good. You need to research yourself and get satisfied by the pair before investment.
What pair in LP you think is the best for investment? What APR it is offering? Will be glad to see your answers in the comment section.
I hope you find this post useful and informative. If you do, please remember to reblog it so that it reaches as many people as possible and that they can benefit the most from it. Also, remember to upvote, which will help me financially and grow my account.
IMAGE TAKEN FROM CANVA
Thank You!
Best Wishes.
Posted Using INLEO
good information about LP investment. I have invested in swap.hive and colony pair. The APR showing right now is 24.7%.
Congratulations @aliakbar2!
You raised your level and are now a Minnow!