Okay, it has been about a month since I went into the SHIB/USDT liquidity pool and around 2 weeks since I joined the VET/USDT pool. I need to mention that I had placed around the same amount (in USD terms) into each pool. However without being too exact I can give an approximate amount of returns from the pool only. It is very difficult to give exact figures here. And the returns of being an LP fluctuates day by day, so please be aware.
[Update: 15th August 2021: I have removed my position from the SHIB/USDT pool. It is not doing that well and seems like the SHIB tokens’ performance is rather lackluster. Don’t think there is that much confidence in SHIB.
From what I can see, it seems that the VET/USDT returns are slightly better than SHIB/USDT’s. Admittedly it can be kind of difficult to list down the exact amounts in returns. This is on Binance swap pool which I think should be one of the safest pools out there. Note that there is a difference between Binance pool and Binance Swap. Binance pool is a mining pool while Binance Swap is decentralized exchange. Users can see the daily APY returns and they do change daily. And if you are on Binance LP, you will also get BNB as well. So basically when someone swap cryptocurrencies on Binance Swap, they pay a small amount of BNB (as gas or network fees) and a part of the cryptocurrencies pairs that is being traded. And a portion of this is that given to the liquidity provider as returns. I understand that there are risks to being an LP but I think with the market trading sideways, now is a good time to being an LP. There will be less of an impermanent loss if you were to withdraw from the pool at the right time.
And from what I can gather, the APY can be up to 30%! Now that is nothing to scoff at right? I think I will keep on keeping my VET & SHIB in the pools for the time being. Once the market turn bullish again, I might withdraw and hopefully my returns will be more than enough to cover whatever impermanent loss there is. And if you are thinking of going into being a provider, especially in Binance swap liquidity pool, it might be a good idea to look at the VET/USDT trading pools. They seem to be the most profitable at the moment. For those who are worried, I am pretty certain that VET will only go up in price. The price has been suppressed for quite some time already. The number of projects in their ecosystem is just astounding for it not to rise in the near future.
As for the SHIB/USDT pair, I am a bit concerned. I am not one who goes for meme coins and the SHIB token does not look like it has good fundamentals. Even their SHIBA SWAP seems to be lacking even though they do have quite a lot of funds being locked up in their pool. However I will be looking closely at what is happening to the SHIB network. Seems to me that traders are not that optimistic in SHIB though. Trading volume is rather lackluster as well. And yes, trading volume will affect the returns as more people trading means more fees to be collected. Less trading means less returns. For the time being, I will still be keeping the SHIB/USDT in Binance Swap pool. Everyday I just click on the claim button to get the returns.
I am also very curious what are the thoughts of investors about being an LP. If you have any thoughts or comments on being an LP, please leave a comment below. I would surely like to hear more about this. However it seems that being an LP is not really that popular anymore. Most investors seem to be going for other yield farming methods.