I’ve been supplying liquidity to Compound, Aave, Curve and iEarn (yEarn) for quite a bit and never had any major problem there before I decided to give a shot to Balancer. I liked the concept behind the project and wanted to get some BAL token.
So I went to the most liquid WETH - sETH Balancer pool and supplied a considerable amount of WETH as a single asset.
Before doing so I checked the price of both assets on coingecko to make sure they are practically the same. With the same belief that Balancer will divide the asses fairly like e.g. Curve does I hit the “add liquidity” button.
I’m being familiar with impermanent loss phenomenon, that’s why I always choose asses tightly pegged to each other like stable coins, renBTC, WBTS, sBTC and never have had any issue with them with the above mentioned DefI platforms.
Imagine my surprise after I checked my assets balances in the pool to find out that I’ve been instantly cut a whole 4 ETH if I decided to withdraw!
What I guess should have been done beforehand:
- You should have warned a user supplying a single asset about how many other assets she will get in return.
- You should have set a slippage ratio to choose from or warn a user not to supply a single asset if there’s a loss of more than 0.1%
- And the last one and most interesting: Is this the way you reward liquidity providers? Are we supposed to be market makers who choose the bid/ask spread, set up slippage etc or are we just mindless sheep to be shaved by the system?
I calculated how much time it takes to cover the losses with the 0.01% fees and around 200k daily volume. Now ready? It will take me whole twenty years to just cover the entry loss not to speak about any profit.
To say I’m disappointed is to say nothing.
So my question is: is there any way to compensate for the loss?
P.S. I found it’s quite strange than I can’t swap WETH to sETH or vice versa on https://balancer.exchange/#/swap although there’s such a pool on the platform.