Investing In Liquidity Pools

Over on Tribaldex I have found info on my participation history in liquidity pools over the years. The fees I earn from pool swaps add up when there is plenty of liquidity. Example below are my top earnings.

Although it has been many years since I partake in most of these liquidity pools I wished I had sticked around as the fees earned seem very lucrative. Just look at the swap.hive and DEC pool. There is nearly $46 of fees that I had earned.

All this is passive income. All I have to do is stake 50% value into each of the two assets and earn as people swap between the two assets. The risk would be something called impermanent loss. When one token drops in value while the other rises I will loss more of the higher value token while obtain more of the lesser value. However this can adjust back to 50/50 as long as I do not withdraw from the liquidity pool and the value of the tokens shift back to flat.

I am currently invested in PWR and swap.hive pool and over the past few months have seen the value drop significantly. This is mainly due to the price of swap.hive, but in terms of earning swap.hive I have pulled in daily of 3 swap.hive.

The daily swap.hive rewards is based on investors' portion of the tokens invested in the liquidity pool. This is known as liquidity pool rewards. So in addition to earned fees we can earn pool rewards. It can add up quickly if one has a large portion of assets in a liquidity pool. Something I had ponder in investing instead of just staking tokens.

I currently have nearly 3k hive in value invested in this one pool and hence I am able to yield a nice passive income. This is just one more way to earn crypto that I have found effective. I have participated in this liquidity pool for over a year and plan to stick around for the foreseeable future.

Thanks for reading this post.