Jump to content

egld value dropping in LP token ?


shnur
 Share

Recommended Posts

Hello, I am new to farming so I apologize if this is a dumb question, but why is the egld value dropping when I hover over the (i) on my staked EGLD-MEX LP. It is going down by .0001 every few minutes. Is it to do with the price of MEX? Just curious... 

 

 

Link to comment
Share on other sites

  • Elrond Team
48 minutes ago, shnur said:

Hello, I am new to farming so I apologize if this is a dumb question, but why is the egld value dropping when I hover over the (i) on my staked EGLD-MEX LP. It is going down by .0001 every few minutes. Is it to do with the price of MEX? Just curious... 

 

 

When you add liquidity in the EGLD-MEX pair, you add at the current egld-mex price, but if the price changes, your LP token changes in accordance to this.

Example if you add at the price of 1 egld for 1600000 MEX,  1 EGLD and 1600000, and this was one EGLD-MEX LP token, then if the price moves to 1 egld for 400000 MEX, then you end up with  1*sqrt(1600000/400000) EGLD and 400000*sqrt(1600000/400000)MEX => you end up with 2 EGLD and 800000 MEX for your LP token.

This example does not take into account fees accumulated from swaps, and neither the accumulated rewards from farming the LP token, only the price movement, so it is kept simple.

  • Thanks 1
Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

 Share

×
×
  • Create New...