Geyser versus LeoBounties - Is the LP Really Worth It?
It is a cool and rainy Sunday, and it feels good to snuggle into a blanket, sip on my coffee, and take a look how my money is doing. I feel there is some type of reckoning on the way, as I have been looking at past data, calculating averages, and weighing all possibilities. Though I haven't reached a formal decision yet, I am pretty sure to get there within a week. For now, I feel like sharing my thoughts here, hoping for either a No man, don do it! in the comments, or a Go ahead man, I'd do the same thing. Not that it would make me change my mind, but I always appreciate some perspective.
Looking Back at Geyser After Six Months +
At the end of last year I was pretty excited to get my feet wet with the brand new DeFi opportunity LeoFinance brought out: the famous WLEO-ETH liquidity pool. After losing everything in the infamous hack, but being reimbursed by the LeoFinance team, I got even more excited to join the pool, and I entered it with 2.07 ETH and a matching amount of 4819 WLEO. It was amazing to see that each month the LP rewards, called Geyser, kept increasing gradually. Of course, at the time the price of LEO was also climbing steadily, approaching a dollar in value in April.
Even now, that the price of LEO came back down again, together with BTC, HIVE, and most alts, it's still nice to see a Geyser reward of good 150-200 LEO a month. Or is it??? A closer look at APY Vision makes my impermanent loss abundantly clear: My initial investment of 2.07 ETH has dwindled down to 1.71. In other words, my participation in this pool has made me lose an entire ETH!!! Granted, I now have 9511 WLEO, and I this is a risk I was well aware of. Still, it makes me feel less enthusiastic about the whole thing. Had I just kept my ETH in my wallet, I would be worth a grand more.
Don't Ignore Cub Finance!
Since I'm looking at the balance scales, I should also include Cub Finance here. After all, I got a nice fat airdrop of CUB (okay, back then it actually felt pretty fat) for my holdings of LEO and WLEO. Plus, each Geyser payout I received I kept investing into Cub Finance, either buying BUSD or BNB, or directly CUB, when I thought the $3.00 price was cheap. After investing, harvesting, compounding like this for a few months, my holdings in the farms and dens on Cub Finance are worth $546. (I'm not counting the $442 of BTCB, as that came from another source.)
Don't get me wrong here, I'm not regretting having entered either the Uniswap pool, or Cub Finance. At this moment I'm just contemplating how to proceed. Should I stay or should I go? And in either case, which way?
CUB for Sure. But Is The WLEO-ETH Pool Really Worth Being In?
After a (relatively) long time, CUB has finally started to move upwards a bit. I know, ten cents are not much, but when was the last time this has happened? Since the gradual release of Kingdoms, it seems like good things are happening here, so I expect CUB to do well... In any case, I'm not thinking about leaving. However, there is a good chance I will reorganize my funds, making use of the BNB-BUSD kingdom. That also means, I'll leave those respective farms, freeing up 186 CUBs, which I'll dump in the den until the CUB kingdom arrives.
But what about the WLEO-ETH pool on Uniswap? Can I expect WLEO to rise up again so people will want to swap my WLEOs back to ETH, making my loss actually impermanent? I'm not so sure. On the other hand, the same trend may just as well continue, and my last remaining ETH could keep melting away. And all for what? A monthly Geyser reward of 150 LEO? Couldn't I make that much elsewhere?
Leo Bounties: Reward for Delegating HP to Leo.Voter
As it turns out, there is a really nice and lucrative way to get a similar return, without even having to leave the HIVE ecosystem. It's very simple: by delegating HivePower to @leo.voter you get a daily Leo Bounties reward. At the moment, for a delegation of 1053 HP I'm getting an average of 0.56 LEO a day, calculated over the last 30 days. In comparison, my average Geyser reward, calculated since January 1st, is 4.44 LEO a day.
So let's just assume I leave the WLEO-ETH pool completely, put my remaining ETH back into my wallet, and turn my WLEO into LEO, then HIVE, then HP, and increase my delegation to @leo.voter by a tenfold. I would still get a comparable amount in Leo Bounties every month as I now get in Geyser, but I wouldn't have to worry about my ETH melting away, and in fact could invest it elsewhere. Best of all, I can always undelegate / power down my HP when I get tired of this. Meanwhile my funds will always remain under my control. Whereas now... I'm just realizing that I still have to figure out how to exit the pool!
Impermanent Loss on CubFinance
Though as I said, I'm still pretty comfortable on Cub Finance, I can't ignore a similar impermanent loss as I've seen with ETH. Of course on the Binance Smart Chain it's BNB that keeps melting away. I remember having had more than one at some point, which by now is down to about 0.4 BNB. Since this is the currency I have to pay all my transactions in, I'm particularly not happy about this. But once again, it's a risk that I knowingly took, so I can't have a word of complaint.
The way I understand from post like this one, with Kingdoms I can prevent further loss. If I put my BNB into its Kindom where it's paired with BUSD (of which I happen to have a matching amount), in addition to earning some rewards in CUB, I'll be able to see a gradual increase in both BUSD and BNB. And that seems quite desirable! Sure, I'll have to completely rearrange my holdings, freeing up my bLEO currently paired with BNB in the farm, but all that can still be converted into BNB... or even CAKE. Why not?
One More Week to Mull Over Everything
Not being a fan of hasty decisions, I have decided to let these ideas ferment a little. On Wednesday we should get the next Geyser reward (though judging from the past months, chances are it'll arrive late - one more reason against it). And on Sunday, while compounding my earned CUBs, I'll be also ready to make these greater changes. Until then, I'll be happy to see all kinds of comments, suggestions, and advice of any kind. Are there any good reasons to stick with Geyser that I haven't considered? I'll appreciate any input.
Posted Using LeoFinance Beta
