Profit Results: Providing Liquidity to a Liqwid (LQ) Pool on Sundae Swap’s DEX
The Cardano (ADA) ecosystem has seen a substantial amount of growth over the year and one it’s main application thus far has been Sundae Swap’s DEX (decentralized exchange). With the launch of the DEX comes new financial opportunities such as becoming a “liquidity provider” by adding your own cryptocurrency to the platform to establish liquidity pools, where users can swap the respective cryptocurrencies in a decentralized fashion. In exchange for providing liquidity users receive a percentage of the transaction fees as a reward in the form the Sundae (SUNDAE) token.
Here are the results of 30 days of being a liquidity provider:
At the time of writing this article Cardano (ADA) is trading at $00.7984, the Liqwid (LQ) token is trading at $86.22 (108 $ADA per LQ token), and the Sundae (SUNDAE) token is trading at $00.36 (00.46 $ADA per Sundae token).
Deposited 30 days ago:
- 6,821.205 Cardano (ADA) + 114.322 Liqwid (LQ)
Totaling = $15,302.89 (5,446.05 + $9,856.84)
Currently Pooled 30 days later after swaps have occurred:
- 9,182.56 Cardano (ADA) + 84.94 Liqwid (LQ)
- Sundae Rewards Received: 3,592.69
Totaling = $15,948.23 ($7,331.35 + $7,323.52) + ($1,293.36)
As you can see from the results above, there is presently a profit of $645.34 after impermanent loss and the rewards gained are taken into consideration. Dependent on you perspective, that could be a nice profit.
Based on the information we have available, the rewards are temporary and will only be paid for the first 6 months of the DEX being in operation. So this could be one of few opportunities to participate as liquidity provider.
We’d love to hear you thoughts below!