New experiences, branching out - Balancer looks awesome.

in #hive-1679222 months ago

For the last few days, I've been learning about all things Uniswap, Ethereum and WHIVE. Today I decided to branch out and broaden my horizons to Balancer. The post from @khaleelkazi yesterday with his video explainer saw some mentions of Balancer in the comments. I started reading up on it and was quickly fascinated by their platform.


Todays "Liquidity" image from Pixabay

First a look at the last 24 Hours for WHIVE.

  • No new actions of interest from me.

  • The total amount of WHIVE added to pools increased to nearly $10,000 worth.

  • Some transactions happened.

sunday whive.png

  • Strangely, my personal "fees earned" tally decreased. I have no idea why, I thought this was a cumulative tally, but despite the pools being used for transfers, somehow my fees decreased. WTF??? Maybe my understanding of cumulative is wrong, perhaps that"cumulative" total is for all pools, in the last day, not all pools all time as I thought. Anyway, If that is the case and I am earning $0.08 - $0.11 per day total, Then thats not too bad. Todays (if that is right) income for me was $0.0896 which based on my liquidity provided works out at an annualized 9.4% return.

sunday uniswap income.png


Now, on to Balancer.

After reading the comments about Balancer on other posts, I started digging to learn more. It's more foreign land for me, so I start with a google search along the lines of "what is balancer" or something like that.

One of the first things I came across was this fantastic explainer video from Boxmining on Youtube

After some other reading and research, I have decided to dip my toe in this platform and try it out.

Here is what i like so far:

  • The Pool creating allows for many more variations than Uniswap. Pools can have multiple tokens (up to 8) and percentage shares. For example, a Liquidity pool could have 20% WETH and 80% WBTC. A pool can be constructed to contain some of the hottest DeFi tokens in one place, or whatever. The portfolio management options this provides are amazing. Pools also have custom fee settings.

  • Fee income from providing liquidity, similar to Uniswap.

  • A native token - BAL - that is distributed to all Liquidity providers. Enter Yield farming.

  • A nice UI and in my opinion a much clearer site. In my limited experience so far, Uniswap has felt quite clunky and hard to navigate. As soon as I started playing around on Balancer I felt a lot more "at home" if that makes sense. It just felt a lot more "me". Can't really pinpoint why, but it just seemed a lot more clean and professional.

So what did I do?

  • Started of by buying more ETH with fiat. This will be my last fiat - crypto purchase for a little while.

  • Linked my Metamask to the Balancer platform - This was a one time event but cost a whopping $16 in GAS. Ouch.

  • Had to swap some of the ETH into WETH - more gas - this time $1.19 on a $60 ETH wrapping event.

  • Approve WETH spending on Balancer - more gas - this time $1.06

  • Deposited my 0.15 WETH into the biggest pool on Balancer, a 20% WETH, 80% BAL pool - More gas, this time $3.13.

What did I learn?

GAS sucks. I miss HIVE with its fast and free transaction. But ETH is an interesting place to play around, and a big chunk of the fees I'm currently paying are "one time only" in nature.

  • Biggest lesson's here are that you can deposit one single token into a multi-token pool, without needing to have the other tokens in the pool. I deposited 0.15 WETH in, and this was balanced automatically to be 0.0307 WETH and 1.524 BAL. I find that to be an incredible draw-card.

balancer pool.png

The ability to do this seems fantastic. In one transaction costing $3 in gas (beyond the one time fees to set up), you could put 1 coin into a pool that is made up of 8 coins, and instantly own a diversified portfolio of 8 different assets, all contained in one decentralized place earning transaction fees and BAL tokens - WOW, mind blown.


Back to WHIVE.

I really, really think that those of us interested in the WHIVE experiment should seriously work towards adding it to the Balancer platform. I am hooked and think it is one of the best platforms I have come across in crypto-land. Granted, my experience of it is only a few hours, but I am seriously impressed. Even having WHIVE in small proportions in pools with major coins will improve the liquidity of WHIVE and put HIVE on the map in a dynamic marketplace.

The other point is that getting WHIVE listed on @coingecko should become a priority. In order to earn BAL, the token must be listed on Coingecko and have at least 2 active marketplaces. Now Balancer is a market, and Uniswap is a market. Here is the link to list a token on Coingecko. I would assume that @fbslo would need to do this, as the person with the best knowledge of WHIVE. Thats just a guess though.

balancer info.png

{Source - balancer website](https://balancer.finance/)


DYOR

Everything I am writing about over the last few days is purely my own experiences and journey down the ETH DeFi rabbit hole. None of it is financial advice in any way, please do your own research.

Links.


Thanks for reading, and to those following my journey, commenting and sharing my tweets - thank you very much.

Cheers,

JK.

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Great read, now I'm interested in this one too. The only problem is that probably first we need to build liquidity on Uniswap (as the biggest platform) and currently we're in this circle where there's little trades because of low liquidity and we have low liquidity because there's little trades (so little fees).

We'll see where this is heading but I'll definitely try Balancer out in like week or two. Cheers, @tipu curate 3

Its definitely a "chicken or the egg" situation. It's probably going to take for some Hive bigwigs like @theycallmedan to add some meaningful firepower to these pools.

Perhaps there is understandable caution until the hive - whive process becomes more decentralised.

I wouldn't say it's a "problem", if people like wHIVE and Balancer, it is still allowing more liquidity.

But from a purely "For the Good of The Hive!" perspective, yes, getting a stronger presence on uniswap, especially the wETH/wHIVE pair would help the most in the current meta. It is by far where the most trading would occur.

But the second most important is 1inch, and since that's just looking at all the other exchanges, Balancer liquidity can still be found.

Options will open up if the liquidity comes. i think some form of incentive will be needed for LP's beyond the pool fee income.

I have started to play with t2xtoken. It's on tron but the ROI looks good and it's pretty simple. Im going to throw 10,000 tron into it and see how many i can turn it into in a month as a tester. https://t2xtoken.io/?ref=TGFBav9M8b5HaSjo8hnGLpfXTfQoNkNTdG

I've seen blender, the project looks interesting :)

Mate there is so much to learn out there, I've been tinkering around crypto for 2 1/2 years and this week I feel like I'm just getting started.

Posted Using LeoFinance

Tweeted this one out also. Big thank you to everyone retweeting and commenting on my content on Twitter.

Posted Using LeoFinance

Uff, this development and research about Dex-es going forward with a speed of light for me....😎... too complicated...as I mention, we need a pool here where users with HIVE can invest...

One possible reason your total fees could decrease is that they are in two crypto, not fiat. So if either dropped in value between the two times you looked your dollar amount would be less even if you had collected more fees.

But does anyone know why balancer's initial GAS is so high? Is it just preapproving all the common coins or something? That just seems like a pretty large smart contract when no tokens have started moving yet.

Thanks for the tip, I'm learning daily here. The gas is quite a dicincentive at the moment for a small player to get involved.

Yeah... I'm officially sidelined too. Ethereum is now completely over capacity. Even if I could afford it, I'd just be adding to the congestion.

The other point is that getting WHIVE listed on @coingecko should become a priority.

It's already being worked on.

Hi mate, I’m big fan of Whive, and I have an idea how to use it. With the success of YFI, and now YFL (a fork of YFI for the Link community), I was thinking we could do something similar for Hive. This would massively increase liquidity for Whive, drive up the price of Hive, and be very profitable for everyone involved. If you are interested, I would love to chat more. You can reach me on Discord: nextgen622#9647

You are right, trading fees for liquidity providers do accumulate with time. The reason you lost money is because of impermanent loss.

To understand how impermanent losses work fully, I would suggest reading some stuff online, google it. But i will still explain it quickly.

Basically, if you are providing liquidity for ETH/WHIVE, the more the price of ETH/HIVE pair moves, the more money you lose. This is how uniswap allows instant liquidity.

For example, if 1 ETH = 1600 HIVE when you added liquidity, and then ETH goes up but hive doesn't, so that now 1 ETH = 1700 HIVE, you will lose a bit of money. But this money is not lost forever, it is only lost as long as the price is not the same as it was when you first provided liquidity. If the price goes back to 1 ETH = 1600 HIVE, you get all the money back.

The fees, however are a separate thing and accumulate on their own. They are only related to the volume of trading on uniswap.

So basically, if the ETH to HIVE price ratio remains constant, it's better for liquidity providers. Otherwise, you get some impermanent loss.

Thanks for the help with this. These little investments I'm making are just for fun really, and to learn how this all works. Impermanent Loss is now something else to consider, and I appreciate your input.

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#defi with #hive is another level.
Still look blind in this sphere.
Great post to get us going

!BEER


Hey @jk6276, here is a little bit of BEER from @pouchon for you. Enjoy it!

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I also think that Balancer has a much better UI and the pool management system gives the pool creator a lot more options than Uniswap.

Uniswap is great for volume and exposure, but they have a problem with front runners jacking up the gas price, slowing execution, and taking a chunk of the rewards that would normally go to liquidity providers. Plus, please correct me if I am wrong, but I do not think Uniswap gives a native token reward for providing liquidity like Balancer does with their BAL tokens.

And if you wish to increase the yield to a whole other level (we are talking over 1000% annualized daily APY at the current prices of the yield farming pool's token), then you can visit https://bit.ly/DeFiTrade and add liquidity to the Balancer pools listed on their site and stake the Balancer BPT LP staking token to the respective pool(s). This way, you not only receive the BAL reward token, but also the native token of the yield farming pool, plus vUSD and vETH, which leads to phenomenal returns!

The DeFi craze started already, and Hive should definitely ride with this trend in order to get more liquidity and exposure from the crypto community at large and beyond.

Of course with much higher returns comes much higher risk. This is NOT financial advice. Do your own research.