For those wondering what the loss really looks like
2 min read
It’s hard to understand impermanent loss without an example. With our MOON rising aggressively lately, allow me to explain what the impact has been for me as the #9 liquidity provider for ETH/MOON on SushiSwap.
The experience reminds me of “to the pain” in The Princess Bride for those that get the reference. I am fine with getting my butt kicked by impermanent loss because I am numb to such things thanks to 5 years of crypto thug life.
I currently have half of my MOON total in the SushiSwap ETH/MOON liquidity pool and since I started a week or so ago I am down over 5,000 of my MOON total in the pool. That doesn’t mean I lost that many MOON. It means I could. But we don’t withdraw. We don’t sell (until our target price). We take the pain!
There is more to impermanent loss. This is meant to give you a sense of what the pain can look before you decide to jump in. The drop is because MOON went up in price – a LOT – while ETH has been declining.
So far the rewards have been a few hundred MOON, about 5 SUSHI. Fees that providers also get from the pool remain tiny/negligible.
I will keep r/cc posted as this story progresses and provide more of the transactional details next time. To my fellow liquidity providers – I salute you!
submitted by /u/rather_be_hiking
[link] [comments]
