We tested the wear and tear of DotSwap and CEX ending with a certain ex during the transaction process.
DotSwap has a handling fee of 2.5%, the platform takes 0.5%, and the other 2 points are sent to users who provide liquidity.
A certain ex has a handling fee of 0.3%, and the transaction wear and tear is about 10% lower than Dot.
We tried to provide liquidity for Dot's FB-BTC, 100FB pledged dual-currency liquidity, and the first hour's profit was 32u, and 2 and a half hours had passed.
We pledged for a total of 4 hours, and realized a net profit of 180u under the condition of currency price fluctuations, which is about RMB 1,728, and the hourly profit is as high as RMB 319 = 44.9u.
This story sounds exciting, right? But its risk is that the prices of FB and BTC fell. During the period of staking liquidity, due to the fluctuation of FB prices, there was a momentary loss of 500u in the principal, and the profit of more than 100u could not cover the floating loss of the principal at all.
Providing liquidity is like licking blood on the edge of a knife. If there are too many BTC in the pool, it is easy for the dealer to take it all. For example, after miners dig up a lot of FB, they can directly take all the BTC from the pool, and you will only have cheap FB in your hand. If the FB consensus is insufficient at that time, the FB in your hand will be trapped. We cannot predict whether it is a good thing or a bad thing at the moment.
This also reminds me of the game I played when I was a child, with a stick stuck on a pile of sand. Everyone took turns to take a handful of sand, and whoever knocked the stick down lost the game.
Because the FB I bought before doubled, I sold them, and I only had 45 FB obtained through airdrops.
I will see the price tomorrow and report again.
