Thread by @Rentahomefast

Impermanent loss……

I call it impermanent gain you just need to know how to use it right

2/how can you turn impermanent loss to impermanent gain…..It all comes down to the pairs and how an lp works

The biggest thing to note is only lp with assets that you would be okay with holding more of at the end of the day

3/lets give an example of ust and luna and have a total of $1500 ust and $1500 in luna

so our HODL Value is 1500$ $Ust and 15 $luna(1500$)

basing on 1 luna= 100$

4/ lets say we LP these tokens and eth decides to moon on us and goes to 200$
this is where we would see impermanent loss.....but how much?

well tldr we swapped 4.4 luna for about 621 UST (total value is 4242$

HODL value is 4500$ so really not much difference

5/ also note this is just bare bones.....remember you get PAID To lp with swap fees as well as with token incentives.....so lets add a conservative 30% apy on this

well you can use the thorchain @THORYieldApp and you can see that you actually MAKE MORE MONEY when you LP

6/ Now this strategy is too and extent because if the asset moons like 5x or any more than doing a double thats when you will notice the imperm loss.....so TLDR our stop loss is around the 50% or 200% mark where we lose that "Bang for our buck" .....see below

7/ this is how you can use it to your advantage.
the 50% mark and 150% mark as targets when you lp

what do I mean well lets give an example

8/ I just 4xed on my luna and I dont want to sell it all.....well what you can do is sell half (lets say 10k$ worth of luna) so sell to 5000$ ust and lp it

so our pair is 5000 ust and 50 luna
assuming luna=100$

now luna dips to 50$

we now have 72.3 luna and $3620 ust

9/ we increased our luna exposure now by almost 50%......now we think $50 is the bottom so we pull out and hold or if your really convicted sell the stables into luna to make your position 145 luna

10/ NOTE: YOU TURNED 100 LUNA TO 145 LUNA with this trade ......think of the power of this YOU increased your bag by almost 50% and guess what you got paid to do it from the APY from the farm

11/so now lets say luna goes back to 100$

well you now turned that original 10k investment into almost 15k with a simple trade and then some with the aprs.

12/ now lets say it doesnt play out and you lp luna at 100 and goes to 150$

well we would now have 41 luna and 6100 ust...... if you wanted your luna back all ya gotta do is swap ust to luna so now you will have 82 luna but remember you got paid to do it 😉 so technically more

12b/ if we did a 30% yield for a year we would actually have more than if we just held.....take a look.....it says rune but just think of rune as luna.....just using the tool @THORSwap has its the sauce

13/not the end of the world you LP you may have lost a little luna but at the end of the day your are still going to be in the green dollar wise especially if you just have some idle stable coins...It wont always work in your favor but if you dont throw the dart how can you win😉

14/ Use impermanent loss to your advantage....

let it buy the dips and sell the rips for you and get paid to do it

if you enjoyed this thread feel free to share it with someone who has PTSD about imperm loss...... its not that bad 😉

https://twitter.com/Rentahomefast/status/1504545279948865539

*******LUNA not ETH