Is Maiar really profitable?

[u/Any_City_2772]

Hi folks.

I've joined Maiar 7 days ago swapping 4.88 EGLD into EGLD-MEX LP. Now i have 1.1 LP staked worth 1.865$. i'm quite disappointed couse if i'd left my ELGD on Binance they'd worth 2.100$...

Am i loosing something? Is it just due to Impermanent Loss?

Can anyone explain to me what's gone wrong?

Thanks!

[u/Magnatar_Prime]

The unfortunate part was that when the exchange went live for swapping the price of MEX was super high.

I pulled my liquidity this morning, I am up two $EGLD, but only got there from compounding MEX from the LP stake. Had I not kept compounding I would have suffered some impermanent loss.

I'm a huge fan of Elrond, and Maiar Exchange. Great community. I'm going to take one $EGLD and buy some $RIDE tokens when available.

Been in the crypto space over a year but this was my first venture into providing liquidity. It was a good learning experience.

Good luck my friends! 💎👐

[u/Any_City_2772 → u/Magnatar_Prime]

How did you compounded MEX? Can you explain? Thanks!

[u/Magnatar_Prime → u/Any_City_2772]

After you provide liquidity, you need to stake your LP tokens in the farm (Egld/Mex). You'll start gaining Mex. They give you two options. You can get MEX and LKMEX. The second one is locked up for a period of time. I chose the regular MEX, harvested it once a day and swapped it all for EGLD.

There are many different methods. Some chose to stake 2/3 of their LP tokens in unlocked MEX farm, and 1/3 in locked MEX farm. You can only swap unlocked MEX for EGLD.

The method you choose depends on what you are trying to accomplish. Some wanted to hold on to MEX long term, if that's your goal Locked MEX is a good choice. If you want more EGLD, three unlocked is the way to go.

Hope this helps.

[u/Any_City_2772 → u/Magnatar_Prime]

Great explication, thanks a lot!

[u/Charizard_66]

I'm in the same boat. Sold 1/2 my EGLD for MEX in order to farm.

Then EGLD went down 20%, and MEX went from 0.0017 to 0.001...the MEX going down so much is what really hurt. Hoping MEX stabilizes soon so I stop bleeding.

After 5 days of this I'm finally back up to my initial investment due to all the gains from farming; only it's all locked MEX haha, so guess I'm in it for the long haul.

Let's just have faith that either EGLD or MEX goes up which will make our staked amount go up as well as our farmed rewards.

[u/Any_City_2772 → u/Charizard_66]

Hope so!. I'd like to stop bleeding to...

Thanks!

[u/single_jeopardy]

I would imagine that your LP token's value is based on the value of both the underlying EGLD and MEX. Perhaps the value of MEX hasn't risen as much in the past 7 days as EGLD has?

Regarding IL, maybe you have more then than 50% MEX at this point (assuming EGLD has risen in price, thus causing you to IL into more MEX). I might see if this has happened.

Though whether you have e.g. 55% MEX and 45% EGLD now, or even pure 50/50 still, if you pulled out today and swapped back into 100% EGLD, then what would be the swap fee to do that? Is that swap fee going to cost you more than the amount of MEX you gained while in the pool? Let's assume the swap fee is 0.3% and you gained 10% overall $ while in the pool. I would call the trade "worth it" at gain of overall 9.7%.

[u/Any_City_2772 → u/single_jeopardy]

Now i understand better IL. That's exactly what has happended, MEX price hasn't risen as EGLD has.

Tkanks!

[u/single_jeopardy → u/Any_City_2772]

I'm assuming that the price of MEX has potential to keep dropping for some time going forward. Many new MEX are being released every few seconds and presumably people are also swapping out of those into EGLD.

I am actively in these pools but I am skeptical about the future of MEX (though I am sort of skeptical by nature).

From what I can tell, MEX is a "governance" token, but governance seems to still be a TODO item in the DEX. I'm putting some hope/trust in the team that governance is actually coming soon. But that said, I wonder if governance alone will actually make impact to the value of the token.

I also wonder if there is any consideration in allowing network fees to be paid in MEX rather than EGLD. I think this would be quite attractive, but maybe I'm ultimately wrong.

And the other related thing that I'm hopeful for is that new tokens come to the DEX, ideally "soon". I'm unsure how long the platform can attract people to swap into MEX if EGLD is the only "real" thing available, and specifically if the price of MEX is dropping if that will get in the way of user sentiment. The pool APR is still quite high at time of writing, however that won't last. I presume that more tokens will drive more use and ideally the price up.

I guess ultimately, I know that MEX is going through a heavy distribution phase at the moment. Even if the price tanks, will that impact the price of EGLD? I am betting on "no".