FOR TERRA FANS | Nexus Protocol | $PSi HODLing vs ~200% Psi-UST LP

FOR TERRA FANS | Nexus Protocol | $PSi HODLing vs ~200% Psi-UST LP

By crush89 | FOR TERRA FANS | 17 Oct 2021


**Update: 18-Oct and Psi price @ 0.166 UST (+54% from my original LP-entry price). Re-did the calcs and were still up +1.68% despite Impermanent Loss. So, it is still more profitable to get into the Psi-UST LP than to leave $Psi idle in your wallet.

 
What is $Psi?

$Psi is the governance token for the newly released Nexus Protocol, one of (if not the most) anticipated new Terra dApp released following the Col-5 upgrade. Since its pre-sale at a price of 0.01UST, this token has done x13 in the span of a week, and many of us in the community believe this is only the beginning, as the protocol aims to avoid liquidations of borrowed bLUNA and bETH positions on Anchor while optimizing yields, and (semi-secretly) also be the best farming opportunity for Luna and ETH on the Terra ecosystem (or perhaps the whole of DeFi?).

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Psi-UST Liquidity Pool: ~200% APY

So the Psi-UST LP is now almost 1 week old and so I decided to see if its been worth adding a portion of my Psi into the LP or if I was perhaps better off just leaving it idle in my wallet not risking any impermanent loss?

After all, the ~200% APY of the LP (rewarded in Psi and Tx Fees) should be more than enough to keep any crazy price change impermanent loss at bay, right?

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Well, the price of Psi has increased by about 25% since I went in on the 13th of October (it is now the 17th), so this should have quite a bit of impermanent loss...


Results: LP wins despite impermanent loss 

My calculations (see below, or google sheet here) indicate the I have made an extra 2.66% gains on the LP compared to just leaving my $Psi idle on my wallet, regardless of impermanent loss, and this is just over 4 days, and without even manually compounding my rewards.

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Conclusion: LP wins: no-brainer with SPEC auto-compounding

So in conclusion, we would have to see some reaaaaally large price variations in the price of Psi to neglect the LP rewards.

With more reason, adding to the LP is going to be less of a no-brainer when the Nexus vault comes out on Spectrum Protocol (as has been announced on their twitter), which will allow auto-compounding of the LP. This should increase the APY massively...

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Its also worth noting that the %APY of the LP has stabilized at about 200%, and is remaining high which means that most people who held the pre-sale $Psi have already added most of their $Psi to the LP (speculation on my part...)


$Psi Staking

However, will the APY% of $Psi staking be juicy enough to keep some of the supply out of the LP and into a dormant, locked state?

We shall see when the functionality becomes available within the next month!


nAsset-$Psi LP

Also, before you chuck all of your Psi into the PSi-UST LP, please save some of it for the nAsset-Psi LP coming out soon (click for my article on it). This is basically Nexus' secret weapon and the main reason why the $Psi token is bound for the moon (if you're expecting another x10, maybe then might be worth watching out for that LP impermanent loss xD)!

Also, if you are intested to see what is going on in Terra, see my Summary of the new Terra dApps following Col-5!


Disclaimer:

Non of this content is or should be considered financial or investment advise. I am no financial advisor, I am merely a content writer using freely available data and information to produce the best OC I can come up with for informative and entertainment purposes. 

Also, I replicate my content on multiple platforms to make it visible to a larger audience. This article can also be found on my Loop account here.

 

 

 

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