Multi-Collateral DAI: first 120 days of liquidity provisioning on 🦄Uniswap💦

Analyzing DAI<>ETH LP vs. 100% ETH holding vs. 50/50 holding since MCD inception.

This report analyzes liquidity provisioning on the new DAI<>ETH Uniswap exchange from the moment it was deployed on Block #8,957,433 (November 18, 2019 04:15:18 PM +UTC) to #9,692,210(Mar-17-2020 11:58:52 PM +UTC) or roughly 120 DAYS.

📊DAI<>ETH LP Activity Since Inception:

Some conclusions:

  • HOLDING 100% ETH would result in ~🔻35.97% LOSS

  • HOLDING 50% in ETH + 50% in DAI would result in ~🔻17.98% LOSS

  • DAI<>ETH LP would result in ~🔻10.07% LOSS🔥

  • Since inception (~120 days ago) DAI pool liquidity provisioning outperformed holding 100% ETH around 75% of the time or ~90 days.

  • Uniswap liquidity provisioning on active pools is proving to be a great alternative to hedge your assets as exchange fees generated seem to be outpacing any impermanent losses incurred. Past few weeks we’ve witnessed some of the most volatile times in crypto history. Extreme volatility resulted in increased volume, especially around stable tokens such as DAI and USDC as many rushed to exit their crypto positions. For example, on March 13th alone, DAI<>ETH LPs proportionally earned ~$75,000 for processing ~$25M worth of swaps!

Additional Resources:


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