Time to write another post for the Holozing community. This is my third article published in the community. I am doing this not only to track my progress but also to monitor how the project will evolve in the coming days.
Three days ago, I published an article about my goal of growing my $HIVE Power like a fruit-bearing tree. I mentioned there how $ZING will contribute to the realization of my dream. However, my description was too general:
$ZING is the new kid in town. I plan to sell a portion of what I am holding now and then use that $HIVE to grow my HP delegation to @zingtoken. I still have to decide about my long-term target. We will see how this project will evolve in the coming months and years.
In this article, I want to describe my plan in a more detailed way that includes three steps:
First Step - Unstake a Portion of Your $ZING and Swap them for $HIVE
Last 29 October, I started unstaking 200 $ZING. When I received the 50 liquid $ZING on 05 November, I sold them at 0.0586 SWAP.HIVE each. Yesterday, I sold another 50 at 0.07 SWAP.HIVE. So far, after 19 days. I already earned 8 $HIVE from the rewards I received and I added them to my delegation to @zingtoken.
That's my goal in this first step. As long as the price of $ZING remains relatively high from my perspective, I will unstake a portion of my rewards until I reach the 1,100 HP delegation to @zingtoken.
However, if the price of $ZING falls, I would rather decide to hold them or even buy them from the market. But for now, I am still satisfied with the market price of $ZING despite its overnight fall in price. For me, selling at the current price is still profitable.
It will take two more weeks for the remaining 100 $ZING tokens to become liquid. Once, I complete the sale of my liquid $ZING, that's the time I will unstake another 400, which will require another month to complete.
Second Step - Create a Liquidity Pool
Except for increasing my HP delegation, the goal in unstaking is to create a liquidity pool with 1,000 $ZING and 80 $HIVE. In this case, I will be reducing my HP delegation back to 1,000 and using 100 HP for the liquidity pool instead.
When I did the computation last night, it would take four months to finish this entire process. In the case of 1,000 $ZING and the 80 $HIVE I need, I would either use the $ZING rewards I earned or I will buy from the market. We will see which one is more profitable in the coming months.
However, as I checked the market price of the token this morning, creating a liquidity pool now is cheaper. I only need 1,000 $ZING and 42.15 $HIVE. Reflecting on this price change, this reminds me of "impermanent loss," which liquidity providers need to understand first before participating in liquidity pools. I think that's why @acidyo reminded liquidity providers to wait first for the market price of the token to settle down:
. . . for the price on the markets to settle down a bit to more realistic numbers with the help of liquid Zing sell pressure which at the same time would make entering the pool less risky for your Hive balance. Source
Final Step - Branching Out to Other Hive DApps
This one requires a longer time frame. All the $HIVE you will be getting from selling $ZING, you can use to grow your HP delegation, create a liquidity pool, or support other solid projects on Hive. But of course, before you do that, understand first the tokenomics of the project. We have seen projects on Hive growing and others are struggling. I think a big part that explains the difference in outcome is the design of their tokenomics. Those who struggle fail to take into consideration the creation of an ecosystem that can be sustained long-term.
Thus the process includes the growth of $ZING, $HIVE, and other DApps. This is how I understand the role of $ZING in growing my $HIVE Power like a fruit-bearing tree.
Grace and peace!
The first two articles I published in the Holozing community: