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RE: Understand the Asymmetric Risk

in PRAETORIA3 months ago (edited)

That is great and surprising, thought I was suspicious about the pools after my second land math post. Two things to say though:

I would just swap the DEC to stone and hold $200 worth of stone. Now with the 2X move, I might have $400 worth of stone, as opposed to $289.84 in the pool!

You'd get 90$ worth of stone for 100$ worth of DEC, as there's the 10%. Then after appreciating to $380, if you want to swap back, you pay another $38 for fees, so you have a realized gain of $342, not $400. Still, better than the $289 from the pool.

Second, at least with resources: There's also the savings that one can get my not transferring resources from one region to the next, but using the 30-day-period to transfer them without any cost, by withdrawing from the pool into a different region.

That said, thank you so much for this post! I had to read through it a couple of times and probably don't get everything yet, but that was of quite a value to me.

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Yes. Fees eat up a lot. However the fees are there for a reason. Without the fees there are no incentives to put resources in the pool.

AMM pools are a fundamental aspect of De-Fi, so it is important to understand them properly.