Liquidity pool investment is a world of its own where its opportunities are very vast and exciting. Here you will find more than 100 tokens to make pairs and every token has its own APR profit. As you have noticed on #Binance or any CEX exchange, on staking you get different APR profit for each coin. In the same way in LP you will also get separate APRs from each pairs.
APR is not always fixed. It changes according to market demands. The things that change APR are users attention, volume, liquidity and transactions. The pair that has more of these four things will have more APR profit. In the same way if these four things are less then APR profit will also decrease.
APR Changes according to market conditions
You must concentrate about these 4 and try to be with the tokens which are more demanding according to the current situation. Also one thing to keep in mind that you must choice for fundamentally strong tokens. Not all tokens which is provides best APR is safe. Rather they are risky and there is huge of loss as well.
My interest in liquidity pool investments is very high and I want to make pairs with new tokens daily and keep investing. I watch my investment daily to see which pair is giving more APR. In todays post. I will tell about APR comparison between pools, which pair is giving more APR and why.
First, let us understand what liquidity pool is and on which DEX exchanges you can see it. LP is an investment place where you make a pair of two tokens and invest to provide liquidity and you keep getting profit on every transaction. Liquidity pools are available in #Tribaldex #Beeswap #Leodex. #Tribaldex is my favorite and I use it for the LP investments.
In the same way like other investments, there is profit and loss here also. There is profit when both tokens in your pair increase in price or one token increases and the other stays stable or both tokens stay stable. In this case you are overall in profit and you keep earning APR profit. These are three situations in which you get profit.
If we talk about loss then there are two types of loss here impermanent loss and real loss. If both tokens crash then it is real loss and until you remove liquidity pool the loss will not be booked but as soon as you remove the pool the loss will be booked. For long term investors it is not a loss because when token prices fall they also recover again.
If one of the two tokens falls and the other stays stable then there is impermanent loss. Rebalancing keeps happening and the token that is falling in price keeps getting more investment. As long as there is impermanent loss you should not remove liquidity pool because recovery is possible.
The biggest benefit in this liquidity pool is passive income which you keep getting daily. As mentioned above, every pair has its own separate APR profit. It depends on you what type of investor you are and which pool you want to invest in and what APR you want.
Let us understand this.
In LP there are more than 100 tokens that you can pair and invest. First you have to choose the best and fundamentally strong tokens from these many. Second you have to choose tokens that have high liquidity and the users attention are more towards it.
Remember that you can get profit from LP when there are more transactions there. For example if we talk about hive and hbd, this is known as a great pair because there are more user transactions in this pair and you will keep getting profit on every transaction. In every pair that has high liquidity and more user transactions, that pair will have the highest APR profit.
Some special pairs that have better APR and with more transactions.
Swap.hive: Swap.HBD (around 21% APR)
Swap.hive: LEO (around 19.5% APR)
Swap.hive: Colony (around 24% APR)
Swap.hive: Swap.BTC (12-15% APR)
Swap.hive: Script (around 16% APR)
There are many more pairs that keep giving profit with different APRs. As far as my knowledge these pairs are the best and among them on top is swap.hive:Colony which is giving 24% APR. Keep in mind that their APR is not fixed but depends on volume, liquidity and transactions.
That is why it is better that if you want to invest in LP then do not select only one pair but diversify your investment. Invest in at least five pairs so that you keep getting different APR profits. This way your risk of loss will be less and profit will also increase.
Do you want to invest in liquidity pool? which pair is your favorite and what APR it is giving? Share your opinion 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 Tribaldex
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