I read it, guess i'm to dumb to understand how LP's work best, thought having a large pool with USDC would be good and let volatility come from HIVE side, don't get how the LSTR and SURGE pool would work against each other
A lot of this is theoretical and can only truly be see live and in action with the market forces
I think the theory here is to A/B test the LSTR & SURGE pools
SURGE is paired with USDC
LSTR is paired with ETH
See which one brings more arb profits for the fund
Also, by having LSTR paired with something different on base, it introduces more volatility for LEO & SURGE since SURGE & LSTR are paired with LEO on HE
So imagine a $100 trade buys LSTR:ETH -> sold in LSTR:LEO
Now LEO is hit with $100 sell pressure on HE
Now SURGE and LEO go down from this $100 trade in USD terms
Now the bot needs to trade the other direction (buy LEO & SURGE on HE and trade it on Base for USDC)
https://inleo.io/threads/view/leostrategy/re-leothreads-fpcdtrwp?referral=leostrategy
I read it, guess i'm to dumb to understand how LP's work best, thought having a large pool with USDC would be good and let volatility come from HIVE side, don't get how the LSTR and SURGE pool would work against each other
A lot of this is theoretical and can only truly be see live and in action with the market forces
I think the theory here is to A/B test the LSTR & SURGE pools
See which one brings more arb profits for the fund
Also, by having LSTR paired with something different on base, it introduces more volatility for LEO & SURGE since SURGE & LSTR are paired with LEO on HE
So imagine a $100 trade buys LSTR:ETH -> sold in LSTR:LEO
Now LEO is hit with $100 sell pressure on HE
Now SURGE and LEO go down from this $100 trade in USD terms
Now the bot needs to trade the other direction (buy LEO & SURGE on HE and trade it on Base for USDC)
A simple example but illustrates the direction