Exploring Thorchain - Result of 60 days in the liquidity pool
I’ve been itching to update you all on my LP position on Thorchain, but what fun will it be if I didn’t wait till the 60th day. First of, I need to put this out there, if you own some Rune and you're not putting it to work, you're likely doing it wrong. Also, please check out this post explaining Thorchain and why I became so bullish on it and the first part of this post - Exploring Thorchain liquidity poolWithout any further ado, let's get into it.
I bought in heavily into Rune when it was worth $15.5 and went into the pool with 164 Rune at the price of $17.2 each. I pooled Rune asymmetrically with Bitcoin with the price of BTC at around $60k but in less than a month, BTC dipped to $30k and took the rest of the market with it. Rune dipped to $6 but I was able to reduce the loss on the dip to only 50% instead of over 70% as a result of my LP position.
My projection before the dip was that BTC was going to over perform Rune in the long run which it did, but not in the way I expected. We all had the euphoric speculation that the run up wasn't going to stop till it reached $100k, what we failed to factor in was that there would be dips along the way, anyway, BTC dipped, but Rune dipped more, making BTC still over perform Rune. And this is the result so far.
Breakdown and some speculation
It turns out that providing liquidity has been more profitable than just holding, if I were to leave the pool now, I'll be leaving with 236 Rune, 72 more from what I provided. I’ve earned approximately 10RUNE in fees so far, not much but quite decent for doing little to no work lol.
If I stay longer in the pool and the price of BTC and Rune drops further, I'll be printing more Rune as long as BTC is outperforming Rune. If the price of BTC resumes an upward trend relative to Rune, I may loose more Rune, but my position will become more valuable due to the price of BTC.
Should Rune begin a meteoric pump in price, out performing BTC for some reason and the price of BTC remains stagnant or stays at it's current levels, then I will be suffering some impermanent loss as the Rune position will try to balance out the BTC side, but thanks to Thorchain’s design, the losses I will incur will be refunded as a result of the impermanent protection feature as long as I'm in the pool for at least 100days.
I'll be leaving all as is for now as I continue to monitor the overall market behavior, the present values don't mean much to me now as both the price of Rune and BTC hardly reflect the development going on within their ecosystems on the market value. Hope you learnt one or two things from my experience. See you at the end of July.
This is not a financial advice, I’m merely demonstrating the service provided by Thorchain, for recreational purposes.
All Data gotten from runeyield.info
Check out my other posts regarding Thorchain.
Thanks for reading!
Posted Using LeoFinance Beta
