LP gains down, net market gains up. What to do?

General Discussion
#1

So I’m in a bit of a conundrum. I’ve been staking in the Uni/Sushi wBTC/Badger pools since mid January. I pulled enough LP out after the DIGG airdrop to stake that as well. Other than claiming my pool rewards one time and staking the proceeds, I haven’t touched my positions at all. According to Sett.Vision, my protocol balance is up more than 4x on my initial investment, including half my initial in protocol earnings. So I’ve been very happy with what appears to be a windfall, frankly.

Today someone pointed me to APY.vision, and I had a bit of a shock to discover that I’ve got a large negative net gain against my BADGER LP. We’re talking hundreds of tokens. I understand how IL works, so I don’t need an explanation, I’m just trying to figure out where I am currently w/r/t the protocol multipliers and everything else, so I can determine what to do from this point. I’m bullish on both BTC and BADGER from here, but I honestly don’t know if I want to stay in the pool if BADGER is going to do another 2-4x from here.

2 Likes
#2

I have been thinking about the same thing. It’s really tough to be in a pool where one asset hardly moves while $BADGER moves 2-3x a couple of weeks! The IL for wBTC/BADGER has just been devastating. It’s the same situation for DIGG/wBTC for anyone in the pool from the beginning.

#3

I’ve been and am still currently all badger sett for my badgers since I joined. I did try a small 2k USD value LP WBTC/Badger Uni position last week. Been thinking about doing LP. I’ve spent so many hours in regards to deciding what to do with my badgers, doing many calculations regarding impermanent loss, APY gains, different scenarios in how much Badger or BTC goes up in relation to each other, etc. HOURS AND HOURS. I’ve even gone as far as researching the top 20 BADGER holders looking back at the snapshot votes and their wallet compositions and strategies.

Here is what I’ve decided (for now at least). I’m going to stay in BADGER only sett for my badgers (most of the top 20 have badger only sett or have a majority of their portfolio in badger only sett) I’ve got a decent amount of DIGG LP so I will try to maintain a rewards ratio of 1:1 with badger and digg. I will then sell the digg on positive rebases and pair that with badger on a weekly basis and put that in an LP stake WBTC/BADGER. then keep building wbtc/badger unilp rewards, badger rewards and digg rewards from that WBTC/badger uni LP from rewards from my badger only sett and DIGG/WBTC LPs.
I will then accumulate any DIGG extras after pairing with badger and keep accumulating till it makes sense enough to sell some for WBTC and add to the WBTC/DIGG LP again.
This way it is a somewhat sustainable ecosystem which just keeps on building rewards.

You preserve your badgers from possible IL but you are also getting advantage from high APY from LP , creating more LP from “free rewards” and creating more rewards from those rewards’ LP byproduct.

Hope that makes sense. LOL
You don’t even know how much time I’ve spent on this. reading many articles, educational articles, looking at badger holder wallets on zapper, apy.vision, etc etc etc.

oh, and also badger boost is coming soon which will autocompound everything automatically. Once that happens, our portfolios will grow exponentially due to the power of daily compounding. INSANE Gains.

What are your thoughts with the above strategy? I just literally finalized this today right before writing to you. I believe a lot of us are thinking about this very topic right now and what to do with their badgers.