RE: Airdrop Ending and LP rewards announced.
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Thank you, I learned a lot from this article and your links! I was wondering if, just like any other passive investment, Dollar Cost Averaging helps take the sting out of Impermanent losses, or if it actually compounds the problem?
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The number one thing I would say is liquidity pools are a whales game. So in order to take the sting out of impermanent loss is having enough percentage that the fee earn from the pool help off-set the loss. That said you can still earn with smaller percentage so as long as your not putting in more than you can afford over time (years or even years) the cost is off-set. Then liquidity pools are actually a little backwards in thinking in my mind. If you have 10 of a token and put it in when it's a .01 then it goes to a dollar you'd only have 1 token in the pool with a dollar value. But if you put that same 10 in the pool at $1 if it dropped to .01 then you have 1000 tokens. At which case you could pull the out of the pool and wait for the token's price to go back up if you think it will. When it hits a dollar again you then made you $10 into %1000 but this is very long term thinking and it needs to be on a product you have faith will be around long term to survive the drop and grow back up. This applies to splinterlands for me.
But with these pools because of the LP rewards SL is offering I'm putting into these pool without worry of the impermanent loss because if the token rise I am getting paid out in the token so I have recovered my loss. This is the primary way to combat impermanent loss.