I deposited 17,383.953 AGIX last year in the month of June into AGIX-ADA liquidity pool, now when I try to withdraw it shows only 3017 AGIX and 3188 ADA.
First of all
- I don’t remember depositing ADA, cant even find the transaction, I only see AGIX being sent from Wallet
- The price of AGIX went appreciated but why am i receiving only 3017 AGIX ?
- How long should I wait to get my 17,383.953 AGIX back, like what should the AGIX/ ADA price be ?
PS: I read impermanent loss, but this is the first time facing it, its traumatising me for sure.
Thanks a ton in advance for anyone who clarifies my above queries
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When using the ZAP in feature you are selling half the token to be able to make up the liquidity pair of AGIX and ADA. There is no ZAP out feature so you need to trade the ADA back to AGIX if that is what you want. And yeah AGIX is experiencing huge impermanent loss right now with the pump.
Looks like you don’t know how liquidity pools work so watch this: How do LIQUIDITY POOLS work? (Uniswap, Curve, Balancer) | DEFI Explained - YouTube
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When you add liquidity to a pool let’s say ADA-USD and both are worth 1 USD, as an example, it asks you to add equal parts, that is, if you add liquidity you have to have 10 in ADA and 10 in USD = 20 USD in total.
In impermanent loss what happens is that they are being traded. The token is finite, and you are a liquidity provider. That means you are trading both tokens or cryptocurrencies. Each trade you make earns you 0.3%. But regardless of the rate earned, if a trade is made from one coin to another, something happens. And it is the impermanent loss (temporary or permanent).
before
No price impact
1USD= 1USD
1ADA= 1USD
if a pool (like 10 ADA-10 USD=20 USD) and you are the only liquidity provider (example) and someone makes a swap of 5 USD for ADA, ADA goes up in price because of the impact price and the pool is as follows (without fee) (5 ADA-15 USD= 20 USD). You being a liquidity holder and as someone else made the swap, someone else exchanged your USD for more ADA.
after
Price impact
1USD= 1USD
1ADA= 3USD
This is the same thing that happens when you go to an exchange house and exchange one currency for another, you give one currency for another paying a fee, and if you run out of currencies for the one you wanted to exchange, you have to go to another exchange house.
