The Risks of Liquidity Pools....
hive-167922·@mawit07·
0.000 HBDThe Risks of Liquidity Pools....
<center>  </center> Today's post is illustrating some of my failed investments to date. Failed in the part that I am holding the investments at a loss but have yet to sold but not sure if they will break even. I am not holding my breath. <h2>Osmosis Draw Down</h2>  My original $20k investment in Osmosis has now dwindled to less than 50%. What is worse is since OSMO, native token of Osmosis, has fallen in price my pools participation has accumulated a lot more OSMO. Close to 50% of my portfolio is now in OSMO even though I started out at zero when I had $20k investment.  Recent days OSMO has drop to a new low and continues to fall on a daily basis. The token is used as a reward for people providing Cosmos IBC tokens to the platform for trade. The tragic part of this is the value of OSMO has drop since I first purchased and while investing in the liquid pools it has only lowered my overall principal. What was the risks that I did not forsee. First every pool I invested in had 50% of in OSMO which made it all the more pain when OSMO dropped in value. I now learned the lesson of not to put all eggs in one basket and in this case not partake in so many pools with OSMO.    Osmosis has pools with no OSMOs which would have help reduced my losses as OSMO has dropped more than 60% from all time highs just a few months ago. The daily rewards yielding OSMO was adding to the losses as the drop in value in OSMO lead to drop in daily rewards.  Each day now I am earning more OSMO but the value continues to fall hence the more OSMO. All in all its a disappointment as I lost more than $10k in just less than three months. Truly a bad timing to have started investing in Osmosis. <h2>Stable Coin Pools</h2> Many of my followers would know that I also love investing in stable coin pools. One of those that has cause some negative earnings at this time is my UST : RUNE pool. This is the front page image of this post where I am currently down more than 21% from my original principal.  The cause for a lose in yield? RUNE token drop in value and swift causing the value of the pool to drop in proportion. The price of RUNE is the major cause in drop both in assets in the pool and the yield in the pool.  At a yield under 18% APY this pool is technically worse than what Anchor is providing! <h2>Conclusions</h2> I want to be transparent here and be clear to followers / readers and remind myself that I too am getting hit in the current cryptocurrency draw down. In addition I am posting this to spot out the draw backs of participating in liquidity pools. Lessons I take from this is that liquidity pools are not always safe even if there is stable coins involved. It is likely if all assets in the pool are stable coins the principal would hold up better but % yield earned would not be as much as holding riskier assets. The OSMO holding has taught me that holding too much of one token relative to the rest of the assets in my portfolio will lead to a make or break situation. OSMO is falling hard and I am feeling the price pain by holding majority of my portfolio in OSMO. I should be getting away from the asset and balance my portfolio better. None of what I write is financial advice. It is for entertainment purposes only. Thanks for reading! </div> <center> https://images.hive.blog/DQmVsxUBNSEttko3J3d7LDXL9BWGYLXLXAs798Z1EPjeUdf/image.png </center> <a href="https://leofinance.io/">LeoFinance</a> = Financial Blog <a href="https://leodex.io/market/LEO">LeoDex</a> = Hive trading exchange for Secondary Tokens, Low 0.25% fees for deposits and withdraws. <a href="https://hivestats.io/">HiveStats</a> = Hive stats per user <a href="https://leopedia.io/">LeoPedia</a> = Informative content related to anything about Crypto and how to make financial gains in crypto! <a href="https://cubdefi.com/">CubDefi</a> = LEO Finance's Defi with CUB Token
👍 rollandthomas, scaredycatcurate, bearjohn, dalz2, logicforce, tamdike, vrezyy, movebitch, therabbitzone, mktmaker, gualteramarelo, phul, thranax, guurry123, magic.bee, voter, a1004, libertygame27, ricestrela, libertyctp27, libertypal27, plusvault, libertymusic27, libertypob27, goldmonsters, patronpass, arrrds, lolz.bee, tomwafula, minerspost, darkpylon, ctrpch, leo.voter, hiveupme, core.voter, bitrocker2020, dante31, thauerbyi, roleerob, annabellenoelle, mindtrap, asimo, obsesija, gallerani, ireenchew, dlike, contrabourdon, ph1102.leo, coinlogic.online, leofinance, hivecurator, leo.tokens, adamada.leo, rondonshneezy, broadhive-org, impurgent, banzafahra, oluwasamlex1, khaltok, blesker, rufans, minnowspower, dedicatedguy, megavest, michelmake.util, trendovoter, rmsadkri, w-t-fi, citywriter, solominer.leo, ali-h, swap.vault, vault.burn, coretoken, kevinwong, funnyman, thelordsfinest, gniksivart, runicar, bahagia-arbi, steemxp, flyingbolt, rewarder, cielitorojo, simbank, elgatoshawua, cugel, tan.dev, tan.reg, tan.extra, tan.stake, theguru.photos, pardeepkumar, ocupation, enjoyinglife, trendobounty, sacrosanct, thesimguru, vaulttoken, vihan, elektr1ker, winebank, wine-ico, wine-token, wine.bot, kavii, xleo.voter, saboin.leo, ew-and-patterns, shortsegments, vintherinvest, break-out-trader, babytarazkp, torrey.leo, failingforwards, pouchon, travelwritemoney, mcoinz79, cryptololo, leoalpha, jk6276, leotrail, neoxian, waivio.curator, aamirijaz, joedukeg, jlordc, legendchew, ifeoluwa88, sanjeev021, sharkthelion, photolovers1, beyondhorizonmm, jagmeet12, dragonmk47, dwixer, waivio.match, hk-curation, franvenezuela, beebay, flamo, der-bierokrat, smoomslive, queker-bee, mary-be, damus-nostra-2, queensativa, solistyle2, brainstommer, crazydaisy, khaleelkazi, jeanlucsr, cakemonster, leo.curator, asteroids, chloem, magnacarta, purefood, organduo, bananass, uwelang, hitmeasap, vxc.leo, steemstreems, preparedwombat, scaredycatguide, officialhisha, adedayoolumide, zdigital222, cervantes420, whatsup, bigmoneyman, tegoran, elgringoviejo, mypathtofire, brando28, boboman, meowcurator, summertooth, jmsansan.leo, liotes.burn, ctpsb.stem, ph1102.bee, beetrader, williamtboy, behiver, toocurious, ifarmgirl, jdike, limka, gillianpearce, mayor333, katerinaramm, aboutheraklion, bitcoinflood, fabian98, captain-barabosa, cinqowy, hislab, danielsaori, namelessnameless, videosteemit, sodomlv, fragozar01, listnerds, onealfa.leo, leovoter, webdeals, dwayne16, oakshieldholding, senstlessmonster, hykss.leo, onealfa.pob, thisismylife.leo, onealfa, marketinggeek, moonappics, luckyali.leo, gimme-your-coinz, r0nd0n, meta.condeas, leprechaun, velourex, topbooster, joseph23, dibblers.dabs, scooter77, shebe, whiskeyjack1231, topbooster.leo, saboin.pob, hykss, renovatio, ctptips,