Good day! If you are not familiar with the KOMPUKTER project and what it is, I advise you to first read this material about it
KOMPUKTER is a new Blum meme token with a real longplay strategy. How did it get listed on Ston.Fi in 29 minutes? 👈
For everyone else, today we will look at what liquidity pools are and how to earn passive income by becoming a liquidity provider on Ston.fi. Let's go.

What are liquidity pools?

The liquidity pool can be compared to a "Cryptocurrency Reservoir" or two pans of a classic scale, on each side of which there is an equal amount of tokens in value (in dollars).

Example of the pair $KOMPUKTER - TON
To participate in farming, a user must have N amount of both tokens for an equal amount (in dollars).
At the moment 1 TON = 410000 $KOMPUKTER.
This means that for each TON you need to have 410,000 $KOMPUKTER to participate in the pool. For participating in the farming (providing liquidity) of the $KOMPUKTER token, liquidity providers, depending on the number of tokens provided for liquidity, receive both tokens that they farm - like interest in bank deposits.

For example, the KOMPUKTER/TON liquidity pool has a profit percentage of 26.94% per annum, which is formed from the fees for transactions involving user-provided tokens and depends on the share of a specific liquidity provider. As the number of transactions in the market and the trading volume increase, this annual % increases.

How to become a liquidity provider on STON.fi and earn from the KOMPUKTER/TON liquidity pool?

  1. Buy both tokens of the pair you choose, namelyCOMPUTER and TON,
    To do this, open the currency exchange section and make the exchange you need.

    It is recommended to buy KOMPUKTER tokens on BLUM, so you will receive additional Meme points.
    Or directly on Ston.fi

  2. By purchasing both tokens of your chosen pair KOMPUKTER and TON, open a liquidity pool, provide liquidity to the pool and you will become a provider and receive %.

  3. Provide liquidity to the pool by clicking the "Enter an amount" button and get your rewards!

    ATTENTION! Remember that you can withdraw your TON and KOMPUKTER from the liquidity pool at any time and stop being a supplier!

    Now let's look at the risks and how you can lose money on liquidity pools?

    Overall it is safe and you will consistently receive % of the fees for providing liquidity in the pool.

    Let's figure out what can happen? For example, over time, token prices change, and the number of tokens becomes disproportionate. But this does not apply to the KOMPUKTER token, since its emission is limited and new tokens cannot appear. Therefore, its liquidity pool is safe in this regard, and this applies more to TON since the emissionTON cryptocurrency is not limited.

    Let's give another example about risks in pools:

    In other liquidity pools, token prices change over time and the number of tokens becomes disproportionate. In this case, the token that has become more abundant is exchanged for the token that has become less abundant. Because of this, the amount you invested decreases over time. This is called Impermanent Loss.

    An example of intermittent losses.

    In a liquidity pool consisting of A and B tokens, you contribute 1 A and 100 B, which is equivalent to $100 each (1 A = $100, 1 B = $1). Now there are a total of 10 A and 1000 B in the pool, which is a total of $200, plus contributions from other liquidity providers.
    Let's assume that your share of the liquidity pool is 10%. The total liquidity of the pool is calculated by multiplying the number of tokens on each side, which we can express as 10000 C.
    At the time of depositing funds into the liquidity pool, 1 A = 100 B. Let's say after some time, the price of token A increases, and now 1 A = 400 B. The price of token B in USD remains unchanged.
    Other traders will add B to the pool and remove A from it until the ratio matches the current price (since the price change has resulted in an uneven ratio of B tokens). Since AMM does not have an order book, prices are determined by the ratio of assets in the pool. As long as the liquidity of the pool remains stable, the ratio of assets in it changes.
    Thanks to other traders, the token ratio in the pool is 5 A = 2000 B.
    You decide to withdraw your funds. Since your share of the liquidity pool is 10%, you will receive 0.5 A and 200 B. With the new token price of 1 A = 400 B = $400 (remember that the price of token A has increased while the price of token B has remained the same), you withdraw cryptocurrency for a total of 0.5 400 + 200 1 = 400 US dollars. It looks like your asset has doubled!
    But what if you decide to hold onto the tokens without providing liquidity to the pool? A sharp rise in the price of token A would turn your $200 into... 1 400 + 100 1 = 500. The difference of $100 is what we call a non-permanent loss.
    You can roughly estimate the size of your impermanent losses using this guide:
    Price change by 1.25 times = loss of 0.6%
    Price change by 1.5 times = loss of 2%
    Price change by 1.75 times = loss of 3.8%
    Price change by 2 times = loss of 5.7%
    Price change by 3 times = loss of 13.4%
    Price change by 4 times = 20% loss
    Price change by 5 times = loss of 25.5%

    For more accurate calculations, you can use any variable loss calculator, such as this one:

    How to avoid intermittent losses?

    You can't completely avoid intermittent losses, but you can reduce them. Here are some tips on how to do it:
    1) Choose less popular token pairs - they have less volatility;
    For example KOMPUKTER/TON!
    2) Choose token pairs with lower APR - they are more stable;
    3) Don't invest all your money in one pair of tokens, distribute them into different pools - the big income of some will compensate for the losses from other, less successful pools!

    Conclusion and output

    Liquidity pools are an important tool in the decentralized finance (DeFi) ecosystem, allowing users to earn passive income by providing liquidity. Unlike traditional financial instruments, liquidity pools provide the opportunity to earn a percentage of the fees for exchanges within the pool, as well as additional rewards in the form of tokens.

    The example with the KOMPUKTER/TON pair shows how you can earn on providing liquidity, receiving 26.94% per annum. Due to the limited emission of the KOMPUKTER token and the sustainable economy of its ecosystem, this pool is more stable compared to pools with high inflation or volatility.

    Liquidity pools provide an opportunity to receive passive income, but require a competent choice of strategy. Given the characteristics of the KOMPUKTER/TON pool, it can be considered one of the most stable options for participating in farming and long-term earnings on liquidity.

    The history of KOMPUKTER is not justanother meme token, which appeared on a wave of hype. Thisunique experiment, proving that in the crypto worldThe main thing is community, ideas and strategy.
    That's all. Apply and leave your comments. We have the most up-to-date information on Web3 projects and technologies that are really worth participating in.

    #BLUM #KOMPUKTER #STONfi