Liquidity Pool | RBS Liquidity Pool | What is the benifits.
Dear Steemit Community
In the previous article we have cover four different topics regarding robiniaswap. Firstly I have told you how to swap your steem/blurt to bsc network with all the steps. Secondly how to install metamask and add a BSC Network to metamask to perform transaction in the bsc chain. Third how to invest in Robiniaswap with your swap currency it's very simple and easy process and lastly RBS token now what to do.
Today I will tell you what are liquidity Pool, how they work and their benifits.
All the links are as follows for your convince :
How to swap your currency/ token.
Metamask Installation/ adding BSC Network
how to invest in Robiniaswap with your swap currency
What should you do with your RBS Token ?
Liquidity pool - Brief.
A liquidity pool is a collection of funds locked in a smart contract. Liquidity pools are used to facilitate decentralized trading, lending, and many more functions we’ll explore later.
Liquidity pools are the backbone of many decentralized exchanges (DEX), such as Uniswap. Users called liquidity providers (LP) add an equal value of two tokens in a pool to create a market. In exchange for providing their funds, they earn trading fees from the trades that happen in their pool, proportional to their share of the total liquidity.
Let's take an example robiniaswap.
Their are two type of earning you can do in this type of pool. First is the Pair pool and second is the liquidity pool.
Secondly is the liquidity providers.by this you provide liquid to the pool. In the following pair.by this you will have your share in the pool like if you invest 1 BNB your share in the pool will be 1.05%.
In this manner you will have the share and you will earn a fees of 0.17% from the pool. In this pair pool.
Now someone investment in the same pool RBS-BNB liquidity Pool you will get fees in return.
Now the second part i will explain this is a risky part. In this you have to get the same amount of pair valu. Like RBS-BNP in this you have to have same Amount of value in the both token and you will get the RBS token from the pool.
Risk Involved.
If you are providing liquidity to this type of defi pool or AMM, then you should be knowing about the risk involved in this type of pool. The loss is called impermanent loss.
Impermanent loss means a getting negative value in the dollar in your holding if you are giving liquidity to this kind of pool.
Sometimes the loss is big and sometimes the loss is small depending on the pool size and investment.
In the next article I will be telling about the new development in the robiniaswap and where it will be leading.
hello @adityajainxds,
personally I think this project has a great future so my strategy with this project is very simple, as long as the tokens don't reach 2$ I will buy all the tokens I can and I will bet them to generate more tokens, I know it's a very simple strategy but many times winning means being patient and thinking long term.
This is helpful article that you have shared about Robinia swap and I also think that pool is better option to go for if you do not hold more than one coin and this way we can similarly a good amount of tokens by parking our friends in the pool segment.
Nice post
Thanks for the information my friend, it is very important to know both the benefits and risks of participating in this type of platforms, sometimes we are only attracted by the rewards, but we must know how they work and be aware of the risks, even if they are small.
Greetings friend @adityajainxds, excellent information that you share with us regarding the pools, it is a very relevant information to know the methods of investment in the platform using a single token, also you leave us several links of your previous publications, so we get much more information regarding the RobiniaSwap project.
Greetings @ adityajainxds
A very interesting article about the diversity of options that offers us this RobiniaSwap project, , no doubt that it is very attractive, I am part of it and I am very hopeful to be able to consolidate for the benefit of all , I am sure that with all this range of information that offers us , those new investors will be able to get all the necessary information of the project .
Thank you very much for sharing your publication.
Hi my friend, actually you share with us a very interesting article related to liquidity funds, this allows us to have a better knowledge of the DeFi world.
Thanks for sharing such interesting content with all of us. Regards.
@tipu curate
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Hi @adityajainxds
Is RobiniaSwap decentralized? I wonder.
Understanding what liquidity pools are, how do they work and why do we need them in the first place is a must for anyone who want to be involved in DeFi. Wouldn't you agree?
(actually, I'm not even sure if platforms like pancakeswap, uniswap or robiniaswap should be considered DeFi. Simply because those seem to be centralized projects. I wonder why don't we call it CeFi instead? Any idea?)
Im not sure if I understand :(
Cheers, Piotr
hi @adityajainxds
It's me again :) Hopefully you will read this comment (you didn't seem to read other received comments bububu)
I've small question related to liquidity pools and impermanent loss.
I'm trying to wrap my head around it and based on my understanding:
in that case I would need 5000 RBS tokens and 1000 usd worth od BUSD. Is that correct?
Now, what would happen if price of RBS would:
a) scenario one: RBS would drop down to 0.1$ (50% drop)
b) scenario two: RBS would go up to 0.4% (100% increase)
I presume that the moment I exit liquidity pool, then I would end up still with 1000usd worth of BUSD, but amount of RBS tokens would be different.
Now, my question is: how many RBS tokens would I have at the end of the day (depending on the scenario).
Enjoy your weekend buddy,
Yours, Piotr