HBD Savings (20% APR) Vs Liquidity Pools - Which is more rewarding + reasons why HBD savings is still the safest haven
Greetings to my esteemed Lions on the LeoFinance ecosystem and the entire hive blockchain. It's another day and time to share with you two views on how to attain your financial goals on the hive blockchain using either the Hive-Engine Side-chain platform or the HBD savings. It's your friend @faquan, saying hello from this part of the world.
Disclaimer: This post isn't a financial advise but my thought on how one can see the opportunities in investing in either one of them or both.
I read this post by cflclosers titled: 50 Monthly HBD from Savings Makes Hive My Safe Bet during the early hours of Monday and I decided to compare the profits that HBD savings offers investors and that of providing liquidity pools for certain liquidity pairs.
In the aforementioned post, he usually make at least 50 HBD per month and this is a huge dream or goal for to accomplish in the nearest or far distance on the hive blockchain. Although with much commitments and zeal I can achieve this and beyond.
What drew my attention to this post is the amount of HBD (3,217 HBD) he has in savings and the amount he receives on a monthly basis. To me, there are other ventures on the Hive blockchain that can give him more $ in terms of APR than that of the HBD savings.
This doesn't mean that he is wrong in his decision to do that, remember that this is a decentralized blockchain and anyone is permitted to do what they want to. Please don't be offended with my point of view, I respect yours.
HBD Savings Vs Liquidity Pools
We'll be using the amount of his HBD in savings to analyze the profit margin that could come from both sides.
First of all let's convert 3,217 HBD to $Hive using Hive-Engine swap.
3,217 Swap.HBD = 8,187 Swap.Hive and the number of Hive will amount to about $2,943.2
$446 worth liquidity pools in Cent:CentG was given me about $1.2 rewards on a daily basis for providing liquidity pools for the pair. Just imagine providing liquidity pools worth $2,943 for the above liquidity pairs it'll about to approximately $6.59 per day and in a month ($6.59 X 30) it'll amount to $197.7 and if we agree that the HBD is pegged to $1, then the fellow might be earning up to 197 HBD per month.
Issues Relating to Providing Liquidity Pools and Why HBD Savings is the Safest Place for Investors on the Hive Blockchain
Liquidity pools would have been the best place to invest on the hive blockchain if it's price was stable like that of the HBD savings (20% APR). One of the issues facing liquidity pools is price volatility. This issue isn't just associated with liquidity pools but to all cryptocurrencies and this is why most blockchain has stablecoins to help users in their earnings and to balance the price of the parent tokens.
With the fluctuations in price, one can either gain or loss his or her crypto holdings in split seconds and also, one can earn amazing rewards in split seconds.
Also, tokens in liquidity pools can also loss their pegs which automatically affects investors. For instance, Cent token has lost its $0.01 peg since the bear market and is still finding ways to reach it's peg. Currently, the price of Cent is $0.00218.
HBD savings is still the most formidable platform for investors on the hive blockchain. This is because of it's fixed 20% APR by Hive Witness, although this won't last forever, but at the moment, is still the best means of survival for many on the blockchain.
Posted Using LeoFinance Beta