Something to think about when deciding whether or not to be a LP for wLEO...
If you decide you want to provide liquidity to the wLEO pool on Uniswap there is something you need to consider...
After a full day now of providing liquidity to wLEO on Uniswap there is one thing that I hadn't really considered initially, but may end up being a big deal...
That is the fact that as wLEO goes up, you will hold less and less of it.
Let me explain...
Yesterday I pooled close to 17k wLEO total and a corresponding amount in Ether (in USD terms).
Today, I have a little over $16k wLEO and more Ether than I had yesterday (but the USD value is equal).
Check it out:
If you look down at the bottom there, you can see that my current wLEO holdings are a little over 16k currently.
Why does this matter?
Well, this could become an issue down the road if say wLEO keeps rising more than Ether...
It appears when you create liquidity, the USD value that you contribute in relation to Ether is what stays constant.
For example, if you contributed $2k worth of wLEO and $2k worth of Ether, if the price of wLEO climbs, you will have less wLEO and more Ether.
If wLEO were to go up significantly, you could end up with a lot less wLEO and a lot more Ether.
This may or may not be a bad thing depending on how you look at things...
If you are like me and you think wLEO is going to go significantly higher, providing liquidity may end up being the wrong move in terms of maximizing your returns.
The amount you receive from the 300k LEO bounty for providing liquidity will help offset this loss in wLEO, but if prices keep moving north it could still greatly eat into your returns.
For that reason my current line of thinking is that I will continue to pool some and hold some in other places just in case the price of wLEO continues to climb.
I want to make sure I am not cleaned out of wLEO when it is eventually sitting at $2. :)
Stay informed my friends.