LP Sharing
1. Select LPs with large locked-in value and trading volume;
A large locked-in amount means low slippage in transactions processed through the pool; a large trading volume indicates high transaction fees within the pool.
For example: USDT-ETH; WBTC-USDC; SOL-USDC
2: Occasionally, there will be LPs with small locked-in amounts but large trading volumes;
For example, coins that were recently TGEed - USDC/ETH/SOL
Many people sell the airdropped coins immediately, regardless of slippage and transaction fees.
At this point, I would consider becoming a Limited Partner (LP). I would place a one-sided LP order in advance, referencing the pre-market price, and typically set a higher percentage, such as 1% or even higher, to capture more transaction fees and offset potential Impermanent Loss. Furthermore, I don't linger in the LP position; the duration of the LP order is usually no more than one day.
These high-risk LPs really test your understanding and prediction of the project, and it's very easy to end up with a lot of airdropped coins.
3: Impermanent Loss and transaction fees Impermanent Loss can be compensated for or eliminated through a combination of factors such as transaction fees, price prediction, and currency pairs.
Transaction fee = transaction volume * transaction fee percentage (0.01%, 0.01%, 0.5% or custom) * percentage of your own funds at the current price tick.
Trading volume has already been discussed in points 1 and 2;
In Uniswap v3, transaction fees were fixed and generally followed the lead of large funds. However, in Uniswap v4, this becomes a serious consideration. Lower fees mean more trading volume. Low locked-in positions combined with low fees are unlikely to attract traders because higher slippage can negate the advantage of low fees. In this case, you need to test different fee rates within the same price range, observe the fees, and then make adjustments.
The lower the price range, the higher the proportion of the same amount of capital on the price scale, but the easier it is to jump out of the range and not earn transaction fees. This is a matter of personal risk preference. A steady stream of capital = a wide range, while capital that comes in quickly and goes out quickly = a narrow range.
I choose to gamble quickly because I'm a gambler.
Choosing the right currency pair is crucial, as the joys and sorrows lie between different pairs.
USDT-USDC and WBTC-CBBBTC have relatively low Impermanent Loss, high trading volume, and are suitable for USD or B-based currencies, making them suitable for large funds.
USDT-ETH trading involves significant Impermanent Loss, high trading volume, and high transaction fees. However, if the price is predicted correctly, the Impermanent Loss disappears, and transaction fees continue to flow in.
Tips for beginners
1: Create a Uniswap V3 wbtc-usdc LP
app.uniswap.org/explore/pools/...…
2: Set up two Uniswap V4 eth-usdc LPs
The handling fee is 0.05% or 0.3%.
app.uniswap.org/explore/pools/...…
You'll soon find out your true worth.
