Steemitblog: Deep Dive into DeFi: How much can I earn being a Liquidity Provider?

WHAT IS ROI?

Explanation on what you can make or gain on investment, let’s look at a project All Steem investors want to succeed: Steem Tron Liquidity Pair on JustSwap WST-TRX

DEFINITION OF LIQUIDITY POWER

A depositor of dollar equivalents of trading pairs into the trading pools in exchange for a portion of the transaction fees paid by traders who trade or swap assets on these decentralized exchanges. Providing Liquidity is profitable and safe, so it is attracting investors from outside of cryptocurrencies usual ranks, and it has resulted in billions of dollars moving into DEFI this year.

DOLLAR EQUIVALENT PAIR

A dollars worth of each token is a dollar equivalent pair.

WST-TRX TRADING LIQUIDITY POOL

WST-TRX has over 57,000 US dollars worth of equivalent pair

HOW DO YOU EARN AND WHAT'S THE VALUE?

You can do the numbers yourself.Profit per day times 365 days, divided by total investment or value of the pool. So even if the transaction fees go up and down, and average only one half of 1668, that’s still an annualized yield of over 500%.

It’s amazing, but it’s why Wall Street Girms are worth billions. They make a little money on every transaction. It’s also why DeFi is so hot right now and Billions of US Follars are pouring into Ethereum and the DeFi projects in Ethereum. The yields, even fractions of these yields are far greater then what’s available outside of cryptocurrency and Steem.

It’s quite more profitable to facilitate every trade for a fee, then to make the occasional winning trade to the investment.

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