As the dawning of the new opportunities presented by the WLEO project approach, I thought it would be a good time to run a few numbers.
300,000 LEO bounty.
The LEO bounty for adding to the liquidity pool is 300,000 tokens.
This will be split over 12 weeks.
That means each week will be 25,000 LEO.
I have just received confirmation from @khaleelkazi on discord that the $20,000 of official LEO funds are excluded from this bonus.
- Total pool is $100,000
- Leo price $0.10
- Eth price at $350
- Required to add $1,000 personal stake: 5000 LEO and 1.43 ETH
These assumptions would give an individual a 1.25% share of the bounty total.
This works out to be 312.5 LEO per week. - $31.25
If nothing changes over the 12 weeks (unlikely) that equals $375
That gives an annualised yield of 162.5%
This does not include covering GAS costs (an expense that would reduce the yield, or any fees earned in the pool (an income gained)
The other thing to consider is "Impermanent Loss" This is an unkown in the math, and will depend on price moves of WLEO and ETH
What the hell is Impermanent Loss?
The TLDR is that as asset prices move, the value of your share of the pool may move less as it autobalnces your holdings and you miss out on some of the gains. That's my understanding anyway, I'd recomend more research.
Basically, it means that on assets where the price moves are not corelated, you may lose money compared to if you had just held those assets in your wallet. It occurs because the pool structure tries to keep balance, and arbitragers will come in you may miss out on the full gains in value.
This effect is hopefully ofset by swap fees, and will definitely be more than compensated for in my opinion by the bounty program. Something to read up on however for anyone joining in that has not experienced Liquidity Pools before.
There you go, a ballpark figure of 162.5% annualised ROI plus fees earned in the pool, minus Gas and impermanent loss. Not bad. :-)
Please do your own research - this isn't financial advice. It's also based on lots of assumptions listed above, none of which will be entirely accurate. Could be way off.
P.s. I just notices the new interface doesn't auto-spellcheck - If there are typo's above - sorry.
Posted Using LeoFinance Beta