Interesting guide and I finally start to understand this impermanent loss mechanic.
Seeing as dec is currently way high from the intended soft peg. There's a good possibility it will at some point go down again (at least that's what I think, might be only after the airdrop is complete.. who knows) Judging by the below graph it looks like if the asset decreases in value the impermanent loss grows very fast compared to when the price increases? That would mean quite the impermanent loss if dec ever returns to the peg value.
So in a way you're betting on getting more SPS airdrop and CUB this way and accepting the possible big impermanent loss?
Curious to see how it affected your airdrop, will follow to see the update!
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It’s great and a sign of the financial sophistication of this community that you are analyzing the effect of impermanent loss. I think this is terrific!
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When I first started I put cubfinance on the "to do later on" list as getting the hang of hive and splinterlands was a lot to wrap my head around.
Right now seems like a good moment to learn more about it instead of holding on to a bag of dec just for the airdrop. And my " hive routine" feels natural now too, still learning each day but not as overwhelmed anymore.
I do think this is great too and hope many of the new splinterlands players find their way here, I try to encourage it when I can.
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Well the 50k DEC that I passed over to Cub Finance was going to be something I was going to just HODL or buy cards in-game. So if the price of DEC goes down, it just means I get way more DEC in the future.
Let's say it drops back down to the soft peg, then that DEC would probably increase to over 100k DEC. So besides the fees that I lose, I earned more DEC by just leaving it there.
On the other hand, if prices are stable, I earn CUB and nothing changes in my investment.
So what would happen if DEC skyrockets? It would mean I get less SPS but the fiat value of my investment goes up.
So from my point of view, I win no matter what happens.
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Makes total sense! If you have use for all the coins involved you win either way..
Having more dec is always good, fiat I'd use to buy more cards anyway. SPS is a holder for sure.
Thanks for the reply :-)
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