/post#cm5nv8b8

How much do you earn on liquidity mining?

As my position worth dropped from $293,510 to $275,489 today, I started to wonder how I compare with others doing liquidity mining. Currently, it's doing about ~$1000 per day, on the safe pair WETH/USDC, which is just about enough for me.

How are you doing it? What safe bets are out there that you think people are missing? And finally, how much are you currently pulling in on liquidity mining?

4mo|

Anonymous

|reply||

30 comments

Yep

4mo|

Anonymous

youdo

1k per day with 300k in?

tf

4mo|

Anonymous

Indeed, this is "net" after calculating impermanent loss and taxes. Or do you mean it sounds like a lot?

4mo|

Anonymous

sounds real good is that not close to 100% per year

4mo|

Anonymous

Well, I never really calculate anything "per year" as things change fast enough that it's never accurate anyways. Things go up/down quickly. Some days in December I did ~$4K a day for example, but now it's down to just $1K. Lowest been a day I only collected $400 :/

4mo|

Anonymous

Continue this thread →

What are you mining? Which coins

4mo|

Anonymous

It's right there in the post!

4mo|

Anonymous

Current status: worrying about the dropping prices. If my position drops ~$80K more in value, the entire thing gets liquidated as it's leveraged. Ain't life if you ain't worrying, isn't that how it goes?

4mo|

Anonymous

Phew, price recovered somewhat and now feeling safer. Just collected another $1000 in fees, goddamn I love volatility!

4mo|

Anonymous

Is there a time component to this? Eg could you only stake a small amount (5000$) every minute, collect the fee after 1 minute, close and reopen at a new range? Like never risk a huge amount but make up for it in higher frequency

4mo|

Anonymous

Yeah, I suppose you could do something like that. Drawbacks would be that the smaller amounts would mean less earnings, as you'll get a smaller share of the fees, and that you'll have to either program up a bot that does this (time+risk) or do it manually (lots of time). Time is probably my most scarce resource at the moment, so current solution fits me better.

4mo|

Anonymous

What platform do you do this through? I had 1 BTC that I sold at the low a few years back. I'd had it long enough that I still made money, but I missed out on the six figure payout/this new liquidity mining stuff.

4mo|

Anonymous

Liquidity mining isn't really new, I started using Uniswap sometime in 2018 I think, and have used it since. Still using it and is where I keep most of my positions :)

4mo|

Anonymous

Is this kind of like selling an option contract where you are forced out of your position once the price moves out of your liquidity range?

4mo|

Anonymous

I don't think so. It's a normal Uniswap V3 position, with N total value. Then I leveraged it ~1.5 or so, to increase return. The leverage gets taken back if the position has a total value of less than X.

4mo|

Anonymous

Continue this thread →

No one else doing liquidity mining out there?

January been a good month so far, collected ~$14K (net) in fees so far. Volatility is scary, but damn if my bank account doesn't ultimately love it.

4mo|

Anonymous

what network do you do this on? On chain ethereum would eat up some crazy fees wouldn't it?

4mo|

Anonymous

I'm doing it on Ethereum. Even if the fees are like $100, it matters less when the position is big enough to earn that in fees in a couple of minutes. What sucks is that the slippage can sometimes be 100s of dollars, but oh well.

If you're doing smaller positions, probably networks like Arbitrum, OP or Base would be better, as the absolute fees are way smaller.

4mo|

Anonymous

Interesting- how often have you been rebalancing the max/min of the pool you're in?

4mo|

Anonymous

Obviously depends on current volatility, last three days I've done it four times I think, as my range is pretty small. Overall I think I average about 0.7 rebalances per day, been doing it for 4 months or so.

4mo|

Anonymous

I wonder if you could minimize the risk a bit by using one of the lower-fee networks, higher frequency rebalance but smaller position? Instead of 100k once a day, 5k every 5mins or 30mins or something. I assume the fees are structured in a way to disincentive that but who knows

4mo|

Anonymous

> I wonder if you could minimize the risk a bit by using one of the lower-fee networks, higher frequency rebalance but smaller position?

I did try using the ones I mentioned earlier, and had profits, but not nearly as much as on Ethereum directly. It seems if you have smaller positions, using lower-fees network is better as otherwise transaction fees eat up a lot, but for larger positions, vanilla Ethereum is the way to go.

Fees are split up based on how much of the liquidity you provide for that specific trading tick, so as long as you're in range, you'll get part of the fees, split up by the other liquidity providers + protocol fees. So larger positions ~= in general more fees to collect

4mo|

Anonymous

Continue this thread →

Do the other non-uniswap pools see volume? From what I've gathered other pools have more flexible controls for the liquidity provider beyond the simple constant-product formula (and set percentage fees) Uniswap v3 has.

3mo|

Anonymous

Add a comment