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RE: Understanding Liquidity Pools on Hive Engine - The Importance of Understanding

in #hiveengine • last year

I've been creating liquidity pools on many tokens hoping to get done badges and benefits, but yeah, I really dunno what I'm doing. Understanding the financial benefit might make me more keen into inserting some more significant amount.

last year in #hiveengine by
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     last year  

    If you have any questions at any time... I am happy to help!

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       last year  

      I actually read this paragraph and got very confused. Maybe a drawing might help. I understand that both most have equal part of swap hive and atx, but didn't get the surplus of value versus amount of token.

      You might or might not have noticed, that from the picture above, the pool has around 2049 SWAP.HIVE, but "worth" indicates only 3237 SWAP.HIVE... how come you may have asked? (and for the ones that didn't yet got this... a pool has to have equal value on both sides of the pair, hence if we have 2049 SWAP.HIVE, then 1188 ATX at ~1.72 SWAP.HIVE/ATX, is the 2049 SWAP.HIVE, and so we should have total worth approximate value of 4098 SWAP.HIVE instead)

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       last year  

      Nah... its because the worth value or value of ATX (that is included in the worth value), is quoted from the higher bid on the market (https://atexoras.engine.splex.gg/trade/ATX) and not from the price you see in the pool. Hence why the worth changes... depending on what bids are set on the market.

      Effectively, what I am trying to say, is, if the market bids follow the pool price, then the shown worth will be correct/aligned with the real worth of the pool. Otherwise, it will show a different value (usually lower) than what it is (given the case of the pool being the place where there are most of the tokens/volume, etc).

      For pools where this plays around (aka, most volume and tokens are on the market), then usually the pool aligns easily to the price represented on the market.