Liquidity Pool rewards visibility

Hello,

I’ve just successfully entered MIrror ecosystem. Setting up TerraStation wallet, sending funds from Binance, swapping, buying mAssets and adding them to liquidity pools went super smooth. Great experience so far, just by having some previous knowledge from BSC/PancakeSwap.

The only issue I have is about visibility of rewards from Liquidity Pools and some impermanent loss calculations. I have read the docs twice and as far as I understand:

  • I should be earning rewards from LP, both mAssets and UST depending on trade’s direction.
  • staking liquidity tokens to earn MIR is an additional incentive for liquidity providers to enter the ecosystem, different from Pool rewards

So far I see pretty hefty yields from staking, but I can’t “see” returns from Pools. I don’t see LP Balance changes nor I don’t see mAssets/UST balance changes - just some swings probably due to price difference.

I miss full details that I could get from tool such as Yieldwatch on BSC, where I could get exact information on number of fees earned by pool and impermanent loss calculations. Is there such tool available/in the works? Should I be seeing increase in the number of my LP tokens, or how can I inspect yields of my pools? Or are the rewards distributes solely by staking LP tokens?

I believe this is what mirrormarket.finance is currently working on. Not sure if they have everything you are asking about just yet as it is still in beta.

Currently it seems to only offer a little bit prettier view of Mirror main dashboard + holding, without extra calculations of rewards and impermanent loss. But it does look nice!

I’m still trying to understand if my only “yield” is from staking LP tokens or should balance of LP tokens increase over time.

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The balance of LP tokens does not change over time, their composition changes over time.

Imagine you stake a big deposit of mETH and UST into the liquidity pool and receive a fat stack of LP tokens.

A few minutes later somebody sells 30 mETH against the pool. Then they change their mind and buy it back. Since they would have paid 0.30% transaction fees on both trades, the total in the pool would now be an increased amount of both mETH and UST. Each token can be redeemed for a little more mETH and UST than they could before.

Now if you withdrew your liquidity you would receive back more mETH and UST than you put in, and the difference would be your LP provision reward from fees.

At most points in time there is some impermanent loss in the pool (on one of the two assets, you would receive back fewer tokens that you put in). This can make reporting fees earned v. impermanent loss a little tricky, as it varies based on when you provided liquidity, and that complication is why many dashboards don’t support it.

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