Hi all,
I’ve furnished liquidity in pool ADA/MIN on date 4 Apr 2022 by using Zap In service.
At that time I’ve furnished 40 ADA in total (after separated 50/50 by Zap In).
Now my liquidity position value is 9,9 ADA and 262,65 MIN, so I’ve lost 50% of investment. How is it possible?
Thanks
You should go to the defi-edu-recources section in the Minswap discord so you can learn about how AMM liquidity and impermanent loss works. Farming is used to offset some of the impermanent loss.
Thank you for reply.
Providing liquidity i salso a long term thing . Combined with the farming rewards over time when the token " hopefully goes back up you/we could do pretty well or we could just keep getting wiped out .
I agree. I only do LP and YF in projects that i believe have a shot at long term success.
Do we continue benefiting from the standard cardano staking rewards if we provide liquidity to a pool?
I’ve seen Indigo is doing this when we put ADA as collateral in their CDP, but is that also done by Minswap?
The ADA staking rewards are added to yield farming distribution. You only get them if you participate in a farm and some farms get more than others according to a dynamic distribution formula.