Hi everyone, and welcome to another article!
I have been studying CubFinance and Liquidity pools for about two weeks now. This was following my losses while LPing on Pancakeswap.
I lost about 50% of my position while providing liquidity in the XMARK/BNB pool while trying to farm CAKE. It was a pretty devastating experience because I went in pretty heavy on that pool so I could maximise my CAKE earnings while the pool had such a large APY.
I learnt a lot from that experience, and that is what I will share with you today.
While farming on CubFinance so far, I have had less than 1% in impermanent losses, which is a pretty impressive feat. It all comes from picking your pools right.
First off, let's understand what impermanent loss really is.
Impermanent loss occurs due to a huge change in any one of the underlying assets in a liquidity pool. Say you are LPing BNB/ETH. If there is a rapid change in ETH, say it drops 10% in an hour, you will suffer a great amount of impermanent loss.
There is one way to combat this, and that is ensuring that one of the assets is stable. So instead of doing BNB/ETH, to be safe we'd use BNB/USDT instead. So that a rapid change in the price of BNB will make us have more of USDT, which doesn't change.
Knowing this and applying the knowledge to CubFinance, we see that the best pools would be the ones with a stablecoin base, such as CUB/BUSD. That pool currently has an APY of about 326%, which is awesome. That pool is the safest one to go for.
Therefore, to maximise our gains, we would need to go for the highest APY pool that is also composed of a stablecoin base. Simple as that.
In that case, the nest pools to maximise your gains would be:
- CUB-BUSD
- DAI-BUSD
- USDT-BUSD
Note the deposit fees on the last two however. They cost 2% of your deposit to farm, but this 2% fee will be used to buy back and burn CUB, so we're good!
I hope you were able to learn something from this! If you did, please consider following me and leaving a like on this article. It really helps!
Thanks for reading, and i'll see you next time.
Posted Using LeoFinance Beta
Awesome info mate, this stable coin data I didn't know. My friend I need a little help if it is not a bother. Could you explain me how to do the process to invest in Cubfinance? I have my money in LEO and I don't know which is the way to take my LEO tokens from Leofinance to Cubfinance and in this case invest it in the CUB-BUSD pool which is the one you mentioned as the most recommended. I thank you in advance colleague, I am very new to this defi and new cryptocurrencies world.
Posted Using LeoFinance Beta
Go to the link below for how to convert leo into bLEO.
https://docs.cubdefi.com/tutorials/how-to-wrap-leo-into-bleo
Posted Using LeoFinance Beta
Thanks my friend!
Posted Using LeoFinance Beta
@jfang003 has helped!
Thanks for stopping by!
Posted Using LeoFinance Beta
Your post was promoted by @theanalystjohn
Thanks!
Posted Using LeoFinance Beta
Sounds like a bad experience but I am glad you learned from it and you are also willing to share it.
What do you think about the bLEO/BNB compared to bLEO/BUSD? I think it can swing quite a lot based on BNB and BUSD but I think it is also fairly safe.
Posted Using LeoFinance Beta
Yeah I was able to learn from the experience! i lost a majority of my investment, and I still haven't made it all back. However, I'm getting there!
As for the two pools, I personally think bLEO/BUSD would be a lot safer, although if both bLEO and BNB trend up at the same time, the profits can be much larger over there.
Thanks for stopping by!
Posted Using LeoFinance Beta
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