500% APR on HIVE? Evidence Shows It's Possible...
... but probably not sustainable. I keep track of the current ROI, but if we want to have fun we can annualize it and see some impressive numbers.
I said enough times that on Hive my main focus for the long term is growing my HIVE Power, even if it doesn't grow significantly in the short to medium term.
I also mentioned at the beginning of the year that my Hive goals this year are more complex than what I publish every week.
Because we talked about diesel pools a few days ago, I wanted to show you what has recently been possible on Hive using them.
I won't give you any advice as to what to choose to invest in, because some options are there for the short term, for others, conditions change rapidly so you have to pay attention, and others have low liquidity and are limited in what you can do with them and who can participate (with what amounts). What I can tell from everything I've done in the past month is that they all required active management (daily) to reach these results. Passive management is not an option for diesel pools, in 95% of cases! You can manage them weekly instead of daily (I do that in some cases on other accounts), but leaving them unattended for months or years is a bad idea, generally. As is with any liquidity pool, on any platform and ecosystem.
Since the beginning of the year, one direction I pursued was to have an account where I invested in diesel pools, starting from HIVE as the initial and regularly added investment, with the goal of liquidating the investments at certain predetermined conditions and with at least a certain profit (in HIVE).
In many ways, the strategy I apply on this account is almost opposite to (certainly different from) what I do on other accounts, from picking pairs to how I handle rewards to my time frame and reason for becoming a liquidity provider. Everything has a short-medium time frame, is profit-oriented and the end goal is HIVE.
I invested a bigger amount at first, and then gradually, every week.
These are the results, as of yesterday:
243 is not a big amount of HIVE (SWAP.HIVE) invested, and probably bigger accounts would have issues finding enough liquidity to place their funds and get a higher return, so these results are highly dependent on how much funds you want to invest, at what risks and how involved will you be in managing the investment.
From 246.32 SWAP.HIVE invested, the current valuation yesterday was 343.16 SWAP.HIVE, so if I were to liquidate everything, I'd have a 39.31% ROI (a little less if we account for fees and price impact).
That's a great ROI for less than a month (even less for the weekly investments), and if we annualize it, we get close to 500%. But, as I said, that's more of a funny exercise, because I don't expect the same rhythm to hold. Plus, as time goes by and the seed funds grow, I will find it more difficult to discover the right options to place them at acceptable risks, and they won't have as much time to generate profit.
This is just one way of using diesel pools and what is possible with them. Otherwise, I prefer the longer-term frame, for diesel pools/tokens of projects I believe have a... long-term plan. But even for them, (semi-)active management is required.
Want to check out my collection of posts?
It's a good way to pick what interests you.
Posted Using InLeo Alpha
Some of these pools are so illiquid that when you want to withdraw completely, at once, there will be an unpleasent surprise.
indeed and something we wanted to avoid with zing thus giving LP's decent rewards to make up for both the staked zing apr and hive power apr, been alright so far but will be diluted a bit in the next reward window for other chains and more as more people enter
SWAP.HIVE-ZING has been great both in terms of APR and liquidity until now. We will see what happens after the new rewards come out. Without it, there would be fewer liquid options with high rewards (I just checked and it seems accounts that don't have a spellbook have access to Splinterlands pools; if they receive SPS rewards, that's an option I haven't considered for an account without a spellbook).
I know. I am very careful about the liquidity of pools and if I would be able to exit without provoking massive waves. Generally, for low liquidity pools, I only add a very small position.
gg!
Thanks!
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I’ve got so many tokens too that I’m investing in little by little but my main goal is increasing my HP just like you and that’s why I have never in my life powered down Hive ever since I have been here
I'm glad to hear your main goal is to increase your HP. I believe that's the most important target to have on Hive. And only after that come others.
That's awesome. I am curious on how you are finding good pools. They don't list their APRs. Are you just looking at what has good potential?
They list their APRs on Beeswap. But looking at APRs is catchy. It's more important to check out the rewards you receive, as you might not be able to sell them or you will but a major loss compared to the calculated APR. Liquidity and volume are very important too, especially if you want to build up a higher position. Normally, I rarely aim to hold more than 1% of any LP. The only diesel pool where I have more than 1% of the pool is LEN-LENM because I believe I have built a pretty strong relationship with the owners and I come to know how they think, particularly about their Hive business.
Oh cool, thanks for this explanation. I haven't been looking at Pools, but I might add some, seeing as they seem to have good APRs as well.
It's nice to see how well that pool is going for you. I don't really think I'll bother much with the diesel pool but it would have to be a pair that I believe in both tokens. I do think the APR will drop over time as more people enter the pool.
I am in more pools than SWAP.HIVE-ZING, but it's true, it was and is the primary driver of this profit so far. I expect it to be less profitable too. In fact, the rewards will be lowered today or tomorrow by design, because some of the HE rewards will go to BSC and wherever else they'll create LPs. But everything I have on that particular account is temporary and subject to change. The end goal is more HIVE, not higher diesel pool positions there.
I think i need to learn about diesel pool, you have made a good amount in just one month.
This may be a great month, and it won't be always like that, but that's true, you probably should learn about diesel (liquidity) pools. They are here to stay in the crypto land.
Your hard work paid off and i am sure you won't stop doing hard work for the months to come so hopefully all will be great months.
Not all months are the same. Sometimes we need to be pleased with less.
40% is already twice what Warren Buffett is known to have made per year, but without interruption, for a very long time.
I think when we have tokens that we want to accumulate or hold for the long term then participating in those diesel pools can be a good way to put them to work and earn some rewards from them. Big players would find it hard to participate without significantly influencing the price impact, I think most of them to prefer that, the illiquidity.
There are some deeper pools on Hive-Engine, but probably none for whales to play at will. But for people who decide to use smaller amounts, be active, and not amass higher shares of the pools (unless one has the interest to provide significant liquidity without the expectation to exit other than tiny parts of it at any time), there are some interesting opportunities.
Right. Smaller amounts and being active on managing it, I think are the two most important takeaways. It can be a good source of passive income.
I think one of the ways to actually increase more of this Apr is to invest in more token
Investing in too many tokens makes it harder to track and research, and gives you more work for management. Better fewer.