By now most of you should have heard about the LeoFinance communities new move to make available wrapping the token as an ERC20 token on Ethereum and building a liquidity pool on Uniswap.
- Here is the full announcement for you.
What i want to cover off today is how to plan and budget if you wish to get involved.
Firstly, you will need an ETH wallet - if you don't already have one. By far the easiest option is Metamask, it works well with Uniswap and is an easy to use browser extension.
Next, you need to think about how much you want to contribute. Aim to do it in 1 big lump sum rather than thinking about a small amount each week (if you are planning on using a LEO power-down). Here is why:
If you have not used Uniswap before, there are lots of gas fees.
Enabling a new token - when I did it for WHIVE, it cost $1.33. Expect more when WLEO arrives. Could be $3-5 by then, who knows GAS prices keep going up as the ETH network is clogged up with so much activity.
Staking to the pools. I just tried an example of staking around $100 worth of WHIVE/ETH ($50 of each) into that pool, and the gas fee would have been over $40. Yes $40. Gas is out of control right now.
In summary, you will need a minimum of $50 worth of ETH, above what you want to add to the pool, to do this. Maybe more if the current boom on ETH continues. It could be $70 - $100 in GAS to do this.
So, I think it is important to think about your position carefully. I've seen from @khaleelkazi that the expected ROI of the bonus plan he is implementing may be around 120%. (remember - hypothetical, not guaranteed) That would mean approx 30% over the 3 months of "early-bird" incentive. Lets look at some hypothetical break even numbers:
I'm going to assume $150 in gas total budget - swap LEO to WLEO, approve WLEO spending, stake into the pool, unstake from the pool after 3 months.
Assume 30% return in bonuses over 3 months.
Fee income earned by the pool is an unknown factor. It will depend on how much volume of transactions is generated through the pool. Very hard to estimate.
Assuming constant prices (unlikely but need for this hypothetical)
In simple terms, a break-even investment over the 3 months would require $500 +150 to cover gas start to finish.
There are many reasons why a lower investment could still be a good move. The value of LEO and or ETH could continue rising, (in my opinion very likely). As a learning experience the new skills gained are valuable, plus a deeper insight into the wider crypto landscape. Supporting the LEO eco-system has benefits for all LEO holders, whether they move some to WLEO or not. The WLEO ecosystem on ETH will expand beyond just 1 pool, and even beyond Uniswap if this initial launch is successful.
This post is not intended as FUD, believe me I plan on participating in this as much as possible. The point of this is to forewarn everyone not familiar with how Ethereum and Uniswap is currently working, that you need to have a budget to cover GAS, and a realistic expectation of the costs of participating. That said, I think the upside for LEO, and LEO hodlers is massive, and well worth the risk. This is not financial advice, just an opinion.
What is financial advice is to plan your moves carefully, if participating you want to plan 1 or 2 big investments rather than multiple smaller "dribs and drabs" moves. Don't necessarily FOMO in on day 1, if you are not properly ready yet. It's ok to wait a week or 2 to have a bigger amount to put in in one go.
What will I do.
My plan is currently to have 5000 LEO ($275 at current price) and 0.75 ETH ($350) ready to go when the pool launches.
I will work over the following weeks to have an equivalent amount ready when subsequent pools launch (E.G. a WLEO/WHIVE pool)
After a month or so, I'd like to add that much more again to the WLEO/ETH pool.
I'd then like to be involved when and if WLEO branches out to other platforms - like Balancer as just one example.
These stakes I plan to maintain long term, way beyond the bonus period. I have a hell of a lot of faith in the long term LeoFinance platform, and view both Hive based LEO, and ETH based WLEO to be core components of my future Crypto portfolio.
Please do your own research, don't take any of this (aside from planning for GAS) as financial advice.
Thanks for reading, feel free to share anything you like in the comments.
Posted Using LeoFinance