How to make 100%+ returns using Uniswap v3 Liquidity Pools

You have a large choice of Uniswap v3 Pools to choose from

Fair warning for Noobs

Not financial advice

Different tokens pairs can have different returns

The 10 largest Uniswap v3 Pools

Skill and guesswork are needed.

How to choose the right token pair (for you)

Eliminate all scam and meme coins

High Return Pairs

Draw up a short-list and calculate the return for each pair.

Average annual historical fee returns based on the previous 7 days volume:

Average returns can be improved upon

Experiment: Can I make 100%+ p.a. return?

Why GET?

Small pool size

GET Protocol Tokens

GET seems like Good Value

Maximising the Return

Trading Volume:

Try to pick a pair where the volume is high relative to TVL

Buy a token where you think the volume of trading will increase

Fee:

Pick the fee you want to earn on each trade

Range:

Amount of tokens locked (X scale) at each price (Y scale)
White vertical bar is where my mouse is. Red vertical bar is the current price

Picking the range

A chart can help you select the best range

Working out how much you will earn

Use Excel to help you calculate expected returns.

Impermanent loss:

Avoiding Impermanent Loss

  1. GET goes down relative to ETH. In that case I will keep all of my GET. I am happy to keep it because of the great prospects.
  2. GET goes up relative to ETH. In that case the GET put into the pool will be gradually converted to ETH. If the GET price rises from 1118 to 764 (GET per ETH), then all of my GET in the pool will be converted to ETH at an average rate of 941 GET per ETH. That means I will receive 18.66 ETH (plus all the fees), which is more than the 16 ETH I started with, so I will be in profit. It might not be in as much profit as it would have been if I had kept the GET without putting it in the pool, but it’s still a nice profit.
  3. After rising and falling the price returns to the original level of 1118 GET per ETH. In this case I will be happy because I will receive back the same number of tokens that I started with. In addition I will have earned the Liquidity Provider fees.

Skill based investing

The Proof of the pudding is in the eating (or not)

Adding Liquidity to a Uniswap v3 Pool

Before

Number of tokens pooled at each price point

After:

Number of tokens pooled at each price point

Liquidity pool token

All pool tokens can be viewed as NFTs

Update after 1 hour

Update after 24 hours

The NFT updates its value in real time

Fees

Conclusions

Did I receive the expected 100%+ return?

Love podcasts or audiobooks? Learn on the go with our new app.

Recommended from Medium

Corona Crypto Airdrop

What is blockchain technology and crypto-currencies ?

What is blockchain technology and crypto-currencies ?

2022 The Year of Web3?

FAQ: FluidFi’s Frequently Asked Questions

Project One Light Wallet

ICO Development — Launch Your Own ICO Token For Fundraising

Meet the Coinbase Crypterns who are building the future of money

Consentium — Platform for Communities

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Swiss

Swiss

More from Medium

The best strategies in DeFi for stablecoins

The Stablecoin Wars Are Upon Us

Abracadabra.money: The Degenbox Guide

Crypto safety tips and another technique to evaluate rebase tokens