Be very careful going in on a liquidity pool where one or both tokens are likely to go down in price.
Impermanent loss hurts on the way up, but it hurts just as much on the way down.
This came to mind because of the @danielesesta / $TIME wonderland fiasco from this week.
I had some exposure to a $wMEMO - $MIM LP, which I cut a few days ago.
If one coin goes to $0, the entire LP will go to ~$0 too (because the pool is constantly rebalancing).
Given the recent updates we've been seeing about $TIME / $wMEMO, I felt that LP-ing was too risky.
I am getting rekt in @beethoven_x multi-token LP called "The Magic Touch by Daniele", as all tokens from that pool - $ICE, $SPELL, $wMEMO, $FTM, $MIM - were down a lot today.
IL is actually not too bad since all tokens are down, but net losses on the LP obviously suck.
β’ good tokenomics & value capture mechanism
β’ compelling narrative & use case
β’ solid team
β’ fast growing TVL where the price hasn't caught up
β’ engaged and fast growing community
β’ ability to compete
1. Twitter:
β’ Search for the symbol: Great real time feed.
β’ Advanced Search:
- Add "min_retweets:100" to find popular posts about a project.
- Add "from:@username" to find tweets by a specific username. Can use this to search for tweets by project founders, etc