So, you received your first airdrop from Sifchain, of ROWAN tokens. Now the rules have changed, and you may be a little lost with how to proceed from here. Maybe you haven't been in many Liquidity Pools (LP's) before, or maybe you are just not sure which one would be best. Never fear, in this post I'll attempt to de-mystify things for you as best I can.
First question... How is the rest of the airdrop going to work?
The team have changed directions, and are implementing a requirement that in order to keep receiving the rest of the airdrop, you have to add it to the Liquidity pools. I've seen strong hints that a 98 - 99 % add (minimum) will be required, so you have enough remaining to cover TX fees. Originally, we were due to receive 3 more monthly airdrops of the same amount as the first one. However, it will now be a weekly drop. To work out how much you will get, roughly, simply divide the first drop you got by 4. Should be about right. If you don't add to a pool, you will not qualify for any more airdrops.
I'm not really going to go into details of the arguments for and against the team changing the rules in this way. It is what it is. Personally, I'm quite ok with it for two reasons. Firstly, I'm pretty familiar with LP's, and was planning to add most of my future airdrops in anyway. Secondly, Sifchain exists to be an Omni-Chain liquidity protocol. A DEX is useless if it doesn't have liquidity in it. Staking is good, and secures the network, but the DEX won't grow without liquidity.
Asymmetric pooling.
I'll assume for the rest of this, that you intend to just add the ROWAN airdrop into a pool each week, to maximize the full payout. If you have other assets to add to it, great, but this guide will be for the (likely) many who just want to put the drop into a pool each week, and build it up over time.
STEP 1: Connect.
Connect to the Sifchain DEX. Make sure you have your KEPLR wallet ready.
STEP 2: Calculate.
Work out how much you want to pool. When you receive your airdrop, confirm the rules from official communications. If it is minimum 98% into pools, then work out that amount. I'd round up for safety, but you always want to keep a couple ROWAN in your wallet for transaction fees.
STEP 3: Pool Selection.
This is the main area to take your time with. A wrong choice could cost you through slippage and loss of value/impermanent Loss. The first point I'll make here is that regardless of what you do with the airdrop in regards to pools, there is no such thing as impermanent loss in this case. The cost of the ROWAN received is 0, therefore you can't suffer any loss from LPing it. So - don't freak out about impermanent loss if you are new to liquidity pooling - for this airdrop it doesn't exist. Think of the airdrop as a free way to learn about LPing, and something you can build a new asset base from, and help the Sifchain platform at the same time.
Two options for the airdrop - Pick the big pools, and/or pick the imbalanced pools to add ROWAN to asymmetrically. For both these options, you want to look at the pool stats tab. Here is a screenshot for now for us to look at. The price of ROWAN at the time is $0.398857. Please note these numbers are no longer accurate, this info is a couple of days old at the time of publishing this post, but the example is relevant still.
I've left off the last few column's for this as it isn't really important for how you deal with your airdrop.
The first column after the token name is the internal price of the asset. This is set by how much of that asset is in the LP with ROWAN. The next column is the interesting one, it shows the difference between that price and the price of that token from coinmarketcap. If it's red, it means the token is expensive on Sifchain compared to the overall market. The ones we want to look at for our airdrop LPing is the green ones. We can add to those pools and effectively buy those tokens at a discount by adding our ROWAN to that pool asymmetrically.
Lets look at the cCREAM pool as an example, as it is the most miss-matched price currently on Sifchain. The opportunity here is adding our ROWAN to this pool, to help bring the price back to balance with outside markets, and gain a profit along the way. The best part is just from these numbers we can work a lot out about this pool, and how many tokens will balance it. Currently there is $859.54 worth of assets, with that being half CREAM, half ROWAN. Given the cream price is $76.39, we can tell there is 5.625998 CREAM in this pool. ($859.54/2)/76.39. Also there is 1077.50396 ROWAN (859.54/2)/0.398857
Now, to be in balance with he external price of cream ($115.49), $649.78 worth of ROWAN should be in the pool. That means 1629.12275 ROWAN. With the addition of 551.61879 ROWAN, this pool would be balanced out and the Sifchain price of Cream would match the external price. This is good, as it means you can asymmetrically add your ROWAN to a pool, not lose value from slippage, and help the Sifchain platform to have prices that closely match external prices.
Too many numbers, just tell me what to do.
Either - add your ROWAN to the deepest pools. Those with the highest amount of liquidity currently.
Or - add your ROWAN to the pools were the Sifchain price is below the external price. Be careful not to pick a pool that is very low on liquidity, and if in doubt, follow the example math's I did above to work out how much that pool can handle in ROWAN to balance it out.
My plan - I'm putting most of my airdrop funds into the cRUNE and cETH pools. I don't have much ETH exposure, and this is an easy way to gain some. Very bullish on RUNE, and adding to cRUNE pool is a no-brainer for me. I may look at some smaller pools to rebalance a bit each week, but majority is going in those two.
None of this is financial advice, but I hope it helps people that are unfamiliar with Liquidity Pools to be able to go forth, and LP on Sifchain with a bit more confidence.
"Cosmos Based DeFi" series:
Part 1. Gravity Dex
Part 2. Osmosis
Part 3. Sifchain
Part 4. Thorchain
Unofficial Guide for Sifchain airdrop recipients
Osmosis and Akash
Thanks for reading, feel free to share the link to this article with anyone you think it may help.
Cheers,
JK.
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