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RE: RobiniaSwap native RBS token entered positive trend
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:
- currently price of RBS is 0.2$
- I would add my funds to liquidity pool (pair RBS-BUSD) in relation: 1000 usd / 1000 usd
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
Hello dear friend @crypto.piotr
Your doubts are valid, but there is no concrete answer, since variables are involved, fundamentally the first one is the constant change in prices, and the second one is the total percentage that the liquidity pool has at a certain moment.
From what I have researched, the success in DeFi platforms is that the liquidity pool increases in proportion to a greater injection of external currencies, in this case greater investment of BUSD.
Best regards, be well.