While I was putting some coins on Pancakeswap, a thought came to my mind: if I believe in the potential of a coin, why would I put it in a liquidity pool which will reduce my gains due to the impermanent loss?
I think there are three cases:
a) You think a coin will grow: in that case, just hodl it alone, not in a liquidity pool
b) You are not sure it will grow but you do not think it will crash either: then it makes sense to put in a liquidity pool to earn fees / APY
c) You think it might dump: sell it...
I applied this strategy to myself:
a) I hodl ADA, ALGO, DOT, XTZ on their own mainnets to get staking rewards because I believe in their long term potential
2) I added ATOM, CAKE, EGLD, INJ, LINK to liquidity pools vs. BNB on the BINANCE Smart Chain because I think they are valuable but not sure they will grow faster than BNB
3) I have sold my XRP... Too risky
The advantage of this strategy is that I will earn 100% of the gains on the coins in which I believe. Furthermore, I do not have all my coins on the Binance Smart Chain AMMs, which are still a bit risky despite audits...
To watch my assets on AMMs, I use Yieldwatch: click here for more info.
