So... after almost a full month after PWR dividends I've decided to break my own words regarding the PWR liquidity pool. For transparency I'm writing this post and announcing a couple adjustments (Which I believe will be pleasant to LP's).
The thing is that the other day decided to try something and bought ~1500 PWR with my own funds. I was aware that I would move the PWR price up but whatever. I was curious to see if people was ready to arbitrage the price (down to 1:1).
So I brought the PWR price up to 1.1 HIVE... and two days later, price is still at 1.1
No problem. Glad to see it. People already into the pool is feeling comfy and chill. I like it.
Clearly there's not much selling pressure, and the little remaining is being scooped by a few happy holders and myself.
After almost a month it is evident that the introduction of dividends has been a success. Downside is that the initial APR has been lower than expected. And with that bittersweet taste, I decided to give an APR push to the PWR-SWAP.HIVE liquidity pool.
I took the following measures (already LIVE™).
- LP from @vventures has been removed from the pool (current liquidity = 47K HIVE).
- Arbitraged the pool with project funds (from 1.1 PWR down to 1). Ended with ~6300 HIVE and ~3700 PWR.
With those funds I did the following:
- 1300 HIVE & 1300 PWR added to the Distribution Contract (Updated APR: ~25%)
- ~5200 HIVE Powered Up to @vventures (Always has been the goal).
- 2000 PWR taken out of circulation (sent to @empo.issuer and hence due to be distributed over time to delegators).
- 400 PWR staying in wallet (Have to pay for server & witness costs in a couple of weeks).
~25% APR!
Yes, you read it right.
If you're pooling into the PWR-SWAP.HIVE Pool, you're receiving a 25% APR.
Note that this pool has a depth of 47K HIVE and impermanent loss is partially minimized as PWR is soft pegged to HIVE.
Also remember that those rewards are already locked out into the Distribution Contract and will be active for almost a year (~350 days while writing those lines). No new inflation paying those rewards. It's already minted.
If you want PWR you can only delegate your HIVE Power to @empo.voter and you'll receive a 8% APR paid daily in PWR tokens (or buy it from the pool, but I strongly suggest to farm it rather than buy it).
Final Thoughts
I do not want to mess with the pool in times of volatility or when half a year of the pool's life span has passed.
That's why I thought it would be better to take action now.
I trust that even if some pool participants want to leave sometime next year. The increase in APR will be enough incentive to keep other participants buying PWR.
Quick maths: 20K HIVE exiting the pool would increase the APR up to ~44%
In the meanwhile; @vventures is accumulating HIVE and compounding non-stop.
Have a happy week.
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