Man, I dicovered your channel just one hour ago and I'm having a Whiteboard Crypto's video streak.

it would be great if you included the fees that liquidity providers earn to show that providing liquidity doesn't always end in a loss

Opportunity cost of being a liquidity provider earning fees vs owning crypto outright price appreciation

@youssoufahmed1788

2 жыл бұрын

This makes sense. But the video helps greatly as well. Thank you both

@usefulhappybros

2 жыл бұрын

Beautiful.

I'm liking every video you do, I want to support the channel because of the great work you are doing guys!

I stumbled upon an absolute gem of a channel here, keep it up!!! When is the "how to reduce risk as a liquidity provider" video coming?

@WhiteboardCrypto

3 жыл бұрын

Very soon, we have a bunch of videos in the works!

@zes7215

2 жыл бұрын

no suhc htin gas easix or bx or etc

@ZeNz0r01

2 жыл бұрын

@@WhiteboardCrypto i think it exists already, don't forget to add it to the description 😉

Easy to understand and very clear. Thank you.

These playlists are a fantastic place to start in the world of crypto. Thanks for taking the time to put them together! Amazing doodle skills too! They really help demystify things for me! Have shared the channel with a couple of friends and will see what I can do about sharing wider.

you are one of the best around!!!!... cheers from Mexico!!!! keep it up.

Thank you very much. The best I had found so far.

Best explanation on YT, thank you.

It's a precious service that you're providing. Compliments. 💐

Great jobs guys. I'm truly grateful for all that I have learned from your videos thus far and plan to act on it. Halfway through the video, I wondered how the trading fees could compensate for the impermanent loss. Good to see you even touched on that at the end.

I don't understand how you can explain something so well.. time and time again.. I enter your videos completely lost and leave much more knowledgeable.

number one , perfect explain , Thank you

Great content guys!! Thanks 👍👍

Thanks. This was helpful. I was about to withdraw early from a pool.

They really are amazing animations.

Your videos are awesome, thank you

Also, divergece loss or gains really needs to be put in context compararing the % of divergence against the fees and rewards that maybe offered by the pool protocol. I hope you pick up from here for future videos

@johnnatoli1728

2 жыл бұрын

I was wondering how that works also. I can't say I totally understand any of this but am I correct in understanding that this explanation does not take LP rewards into consideration? I could very well have missed something.

@alfredhuffman1812

Жыл бұрын

@@johnnatoli1728 correct it does not

@banagan4604

Ай бұрын

Yes, no rewards are taken into account.

Great explanation! Could you by using this video as a base to follow, explain the points to which the LP is triggering a tax event? What needs to be tracked to assure accuracy in calculating the tax consequence?

Great channel and content!

thanks for the knowledge

Nice work folks.

Thanks alot sir !

Great Video!

Thank you.

When you cash out do you receive the same number of coins you provided or do you get the value of the coins you provided?

@IIiiakumaiiII

11 ай бұрын

This is what I want to know as well

Daily dose of internet, lucaas and whiteboard crypto are the most no bs channels on youtube.

Thank you :)

good video - On average How long do you hold positions - a week, two weeks...?

Hey thanks for the video! It's the only one I watched covering price drop of the volitile asset in a LP! Bravo! Still I have got a question... in your case, when price of ETH drop, the LP provider will get more ETH? Sounds like a good hedge in bear market if an investor is bullish in ETH

@WhiteboardCrypto

3 жыл бұрын

Yes, you can technically mitigate some of your losses by providing LP, especially if the fees are high, and even more so if that platform is paying you an extra fee as an incentive. There are "impermanent loss calculators" out there that allow you to mess around with the numbers to quickly see their results, we may create a new video explaining how the math works using a few more examples and give the calculator a shoutout :)

Thank you

at 2:52 you said the price GOAL is 110,00... but if I spend 488 dollars to buy 4,652ETH, my balance goes to ETH= 95,37 priced at 104,88usd, and balance USD=10488 priced at 0,953usd. I didn't fully understand why the price goes to 110,00 with that buy... And why did you used that amount of 488,00? was it the price you should spend, given the circunstances, to make the AMM rebalance ?

@misaktopchiyan8360

2 жыл бұрын

I was asking myself the EXACT same question.I hope to get an answer...

@daniildergunov4849

2 жыл бұрын

Hi, my calculations were exact the same before I assumed, that value of USD remains the same and adds to the prior USD to ETH ratio (so now it is 10488 USD to (95.347ETH*110$/ETH)=10488$)

@pearminhduc

2 жыл бұрын

Yes I have the same question. If we follow his video about Automarket Maker, we will see that it would 104.88 $ per 1 ETH ???!!!

@pearminhduc

2 жыл бұрын

I found the reason: 110 $ is price of eth compared to later usdt in the pool, because price of usdt later is down compared to the beginning

@miguelpais2074

2 жыл бұрын

@@daniildergunov4849 so you are saying that the liquidity of the assets can grow due to the fact that the stablecoin always stay the same. Just so i make myself clear: in the beggining we had: - 10 000 usd on stablecoin - 10000 usd on ethereum after the swap we have: 10 488 usd on stablecoin 10488 usd on ethereum so the total liquidity of each asset grows because the price of the stablecoins stays the same and the liquidity of both has to be the same. if you see this answer pls say if you agree or disagree, I would realluy apreciate it :)

this channel is great, i just wish my brain would store this knowledge better :D

Great video

Really great crypto channel, i wish you 1M followers soon, that would mean people want to learn something, apart from learning the hard way by losing their money while trading on sh..coins without any idea about crypto at all. Congratulations.

Great video, thank you! Could you tell me, what software do you use for animation?

Hey man, I would love see a video on mark cuban’s iron finance bank run. I am reading thru the technical details but still can’t figure out what happened. Would be beneficial I think.

great videos

Awesome vids! I have two questions though. 1. When you cash out from the liquidity pool, don't you get back your eth? Why would you lose? 2. Is the impermanent loss covered by the rewards??

@WhiteboardCrypto

2 жыл бұрын

1) you cash out your "portion" of the pool. So you might own 1%. Sometimes that 1% is 5 ETH, sometimes its 5.5 ETH, depending on how the AMM traded your two tokens. 2) sometimes yes, but not always. You make the most when you supply liquidity AND the price goes up, but that's not always the case because crypto is super volatile for many reasons

@tennotensei8630

2 жыл бұрын

Great questions, I was about to ask the same. Such a fantastic video @whiteboard crypto. Keep it up

I'm gonna make a comment to every video😂 ..this channel doesn't stop surprising me. .

Question: Is this similar to having equities that are "value traps"?

hi, this is a great video about impermanent loss! I just want to ask you something : what about the fees for the trades that the LP earns? maybe i'm blind but i think you didn't considered them at all, why is it? I think they are a big part of why someone would be a LP, so the goal should be more like : impermanent loss let me know if I am missing something, and thank you again for your amazing content

This is a amazing Video. However I think we should also include possible earning if we stake the LP & how we reconcile the stake earring + LP fee again the IL. I do want to see more on how the LP fees get added to your LP or paid to you for creating the LP. It wasn’t as clear as your many other videos

Thank you for so much knowledge. How about if one of your pair pumps, you gain a huge % of impermanent loss. But a month after your 2nd coin pumps too. Does that nullify the impermanent loss. I am just confused if the movement should be at the same time to have a lesser impermanent loss.

Phenomenal

I'm new to Bitcoin and would like to invest. But I've got no idea on how to make real profits. Can someone please tell me how to go about it.

@quinnlavoie2947

2 жыл бұрын

I'm pretty new and feel I have much to lean before placing my first trade. Are you suggesting I lookup for an expert for trading guide.

@adamfred7014

2 жыл бұрын

Yes but finding a high rated broker/expert to guide you isn't that easy.

@victoriaouellet4999

2 жыл бұрын

Hey, I heared of an expert called Tiffany they says she'd pretty good but I would really like to speak with her for guidance.

@wadem.sheehan7152

2 жыл бұрын

I invested with Tiffany some time ago and made huge profits. I'm currently a 19k weekly package and the returns keeps coming. Honestly I felt like quieting my job and focus more on her trades.

@tinajackson9047

2 жыл бұрын

I stumbled across recommendtions and testimonies of people expert Tiffany has helped, and I decided to try her out...my 11th weekly return is currently on its way.

Keep it up ser!

@WhiteboardCrypto

3 жыл бұрын

That's the plan!

Hi Whiteboard Crypto. Do you know where I can find a good explanation on how to buy crypto assets at a reduced price from a liquidity pool? Thanks!

Great video that explained it very well. So in order to take profit both pair in the pool of coins must be virtually equal in value to pull your profit. However, how is this possible in a very high volatile crypto coin market? Is it a matter of gambling? is there any proven strategy on when to get in and out? If there is any expert on this to help explain this part as I think when I read many comments I feel like people they do not know what they are doing, it just a matter of time when they get hit by a big loss

How do you calculate the number LP tokens you receive given the pool's value ratio and product constant (i.e. 50/50 and $10M), the pool's current asset ratio (i.e. 100 of asset A, 150 of asset B), and the current value you want to provide (i.e.. $10,000)? Wha't the formula for the number of LP tokens given those information?

@johnwillliamson8063

2 жыл бұрын

Depends on the pools balance, if you deposited 20% of the pools liquidity then you get 20% of the LP tokens.

Good amount effort has gone into making such an informative video though the last minute is not that clear where you showed the status of Imperm. Loss VS price movements of assets + that chart/graph still looks scary :) Could have explained that in a separate video though. However, overall a gem of a video. Thank you.

Awesome video like all Whiteboard Crypto videos. I did not get the part where $7800 + $7692 equal $15295.

So if we invest long enough, the yield generated from the liquidity pool could offset IL right?

Hi, excellent video I helped me a lot I have a doubt where 14285 comes from in 05:28 ? I know that 1 million comes from the constant product and 130 in the ether quantity in the pool but I don't get where 14285 comes from

can you have a impermanent loss on Staking? or its only a liquid provider on a Liquid Pool?

Transaction fees could cover the impermanent loss if there are enough transactions done right ? This should be taken into account

So does this mean you shouldn't provide liquidity to pairs where one of the coins is a stable coin? The value of those never actually changes right?

Has the video about reducing our risk as a liquidity provider been made?

What about when u get reward in the token you provided in the liquidity pool ie. you provide eth and usdt in a pool and receive eth as a reward can that cancel out your impermanent loss?

I mean by the time you pay the exchange fees, slow ass Arbitrum fees and so on, is there even any 'arbitrage' opportunity left?

You should collaborate with finematics, another great channel like yours.

Shouldn't we also consider fees earned through the transactions to calculate the impermanent loss or profit?

Please, I rely on you to make me better understand ICP🙏🏾🙏🏾

So if ill be liqudity provider? The token that i invested will decrease? Or just the value? Tnx in advance.

About liquidity pools. Is the price of an asset in the pool isolated from the rest of the market? I guess my question is why isnt the price of the Eth in the pool reflected of its true value in the marketplace? In addition what happens over time as new liquidity providers want to add tokens to the pool? Are they doing the 50:50 split at the current market value, or based on what the equilibrium is currently set in the pool?

No way I am explaining this to my grandma.

So when you provide liquidity, your coins' value upon deposit keep their price and are not subjected to the volatility of the market??

Could someone break down example two using the AMM equation (x*y=K). I was able to get the first example but am struggling to get the same answers in the video for the second example. Much appreciated

The way people talk about crypto trading is profitable, please can someone help me on the right path

@a.loismurphy9070

2 жыл бұрын

Forex and crypto trading is one of the profitable money exchange service that elevate Investors and their financial status

@christianladesma9291

2 жыл бұрын

Poor orientation has cost some failure in Forex trade

@edwardthompson8982

2 жыл бұрын

@@a.loismurphy9070 You're right, how many millionaires do you know who got rich from a savings account? This is why I am investing more crypto currency and it has paid off.

@lawerencemiller9720

2 жыл бұрын

I have been seeing comment about Mrs Allie Murray on trading, she must be good base on what I have been seeing

@graigsmith4673

2 жыл бұрын

I'm suprise someone mentioned Mrs Allie Murray, I thought am the only person trading with her. She recovered my lost when I was trading by myself.

hey can you please explain the math behind this, because as per your AMM video if we take out 4.652 eth the price should be around $105. How do you get $110?

@lokeshagarwal6701

2 жыл бұрын

Even I have this question. Can someone please explain?

de centralized lol by putting a buy/sell order to a central server that approved transfer of a item (crypto) from one wallet to another. whats different then a bank zelle to another?

Based on my understanding of the video on Automated Market Maker, If the trader puts $488 inside the liquidity pool which initially has $10,000 and 100ETH Liquidity pool: $10,488 $95.347 As a result of this, 4.653 ETH will be given to the trader in exchange for $488. When I calculated the current price of ETH at this point, 1 ETH = 10,000 / 95.347 = $104.88 1 ETH now costs $104.88 But, how come is it that 1 ETH costs $110 after the trader exchanged 488$ with 4.653 ETH? I'm confused here.

@hannanemyrovska4447

6 ай бұрын

As well as 10,000-7692 isn't 2307; and 1000,000/130 isn't 14285 😅 But anyway, it's a nice explanation :)

In a scenario where I put in two correlated tokens, say 10 wETH and 10 stETH, I will receive an LP token representing my stake in the pool. The price of ETH in dollar terms goes down 20%, what will I receive when i burn the LP token to exit the pool? Will I get 10 wETH and 10 stETH i put in? Or will i receive 8 wETH and 8 stETH because the price went down? Is there any risk if the volume of the liquidity pool is low and spread is high and why? According to your video there should not be any impermanent loss as the assets are correlated. Thanks for explaining!

Thank you for explanation! One question though, where does that 1 mil dollars come from?

@SETC-Tax-Credit

2 жыл бұрын

I also have this question

@bluemoon8512

2 жыл бұрын

Its not a very good quality video. I discovered multiple mistakes but at least the basics are correct.

@charrdnuggz

2 жыл бұрын

yeah also wondering this. is it just a mistake?

Correct me if im wrong but on 5:24 shouldnt 1 million be 100 million? because $10k (100 eth) x $10k (stable coin)?

The examples used in here are with a stablecoin. As the price of the crypto (the other coin, i.e ETH) is always changing, my conclusion here is that providing liquidity with a stablecoin is a bad idea?

@BigSkiSale

2 жыл бұрын

not necessarily. Providing LP essentially forces you to sell the variable coin as the price goes up, and buy it back again on the dips. So you're not losing money; you're maybe just not making as much as you would have if you timed the top and bottom perfectly... which you probably won't do, anyway.

So how often do you adjust your liquidity and when? What's the best way to do that?

Sorry I’m very poor in maths - but from your analogies would that simply means in reality we better hold on to our cryptos rather than invest them in liquidity pool?

What happens if you only provide one coin to the pool eg: eth/usdt pool where you only provide eth (this is possible on binance but there is a fee)

Can anyone share how to calculate the 30 eth for the example of selling the eth to the LP until it reaches 60 dollars?

When you do those calculations you didn't count transaction fees right? Maybe that will compensate the liquidity provider?

@aiyifei4732

2 жыл бұрын

I mean from what you've shown in the video, if you don't count the transaction fees, and if you provide (unstable, stable) coins pair to the liquidity pool, you will always lose money no matter the price of the unstable coin goes up or goes down.

It appears to me that "Impermanent Loss" is more akin to "Opportunity Cost" than it is to say an "Unrealized Loss" on a stock or other security? Is that right? What I'm asking is, at the end of the day, the LP staker can get their stake back and the price increase is still there right? It's not like the LP staker can only ever extract out the exact monetary equivalent of the original stake at new market prices right? So then, if I understand this correctly, Impermanent Loss is just a sunk cost fallacy that's not worth considering? I've watched the liquidity pool video, this video twice, the AMM video, and the more complex Impermanent Loss videos. I just can't grasp the big concern over this UNLESS, at the time of extracting your original stake from the LP your units of the currencies contributed are adjusted (downward in the case of a price increase of one coin) so that the total monetary extraction is only equivalent to your original stake. Am I missing something here?

@jayflaggs

2 жыл бұрын

I think you're absolutely correct lol

Was 488 and 30 a derived numbers or did he formulate them?

Hello, brother, I have a little bit of confusion while calculation guide me through this. From where did you get 1million to divide to 130 eths because if we multiply 10,000 to 10,000 it gave us 100,000,000 and second thing is if we divide 1million to 130 it gave us 7,692 then where did 14,285 dollars come from ?

@lunettesjaunes

22 күн бұрын

bro I'm wondering the same thing I'm trying to find out the answer but me head is smoking right now 😅

How did you come up with the number of Ether that was provided?

I am not sure, how about pair with unstable coin and stablecoin pool? Stablecoin would not rise and maintain the same 1 USD , so it will definitely impermanent loss forever if the unstable coin move up or down.

Good video

@WhiteboardCrypto

3 жыл бұрын

Thanks!

@Beezid30

3 жыл бұрын

You should find places to share your videos like reddit and facebook etc.

@WhiteboardCrypto

3 жыл бұрын

We actually have had a Facebook page for a bit but not many people follow and share just yet. Not sure about what we could do with reddit aswell, if you have any ideas?. Here is our FB page: facebook.com/whiteboardcrypto

Damn, I usually speed up videos, it the first time that I had to see a video in slow motion

one question: if you provide liquidity you will get the ETH back, right? You provide 1000$ in ETH and get the fees. Then you want to have the ETH back and the price went up to 1200$. Or is my thought wrone that I assume that the price will rise in the long-term? Why is it a loss if you hold it because it is still the same amount of ETH and you even receive some of the fees. I still don't get it.

So basically all our bank deposits go through impermanent losses due to inflation but we never knew.

So, basically a liquidity provider has to hope that either both assets rise or stay constant in value for the rewards to make the investment worth it. I guess that is why pools with very volatile coins also have very high APRs. Right?

@thebizness5596

2 жыл бұрын

Correct

Thanks for this content man! very informative. have you all heard this mercor finance? they are building AI trading, is that possible ?

Make a video about bscscan please

If I’m doing the math right, it would mean that if the value of one coin stayed the same and the price of the other in the pair went downwards by a lot then you would still be losing money but only about half of what you would have loss if you just held the coins. Does that align with what y’all’s understanding is?

how come the eth invested in the liquidity pool did not also go up in value?

so im safe in impanent loss if my position is two different stablecoins?

At 4:12, you mentioned if ETH goes back to $100, the impermanent loss is basically canceled. I don't really get it. Wouldn't the liquidity pool continue to lose value for the arbitrager's gain in essentially the same way when ETH rises to $110 in your example?

Can you have an impermanent loss when using usdt

Does the price of the stablecoins in a pool ever change?