I make the simple calculation. Adding liquidity is such as 50 : 50 share. Comparison between holding & on liquidity. And i calculate base on value of PRV or coin , not base on sum of PRV or coin.
Let get started " Ignoring fee & reward on this simple calculation "
Assume, that current price of PRV is $4.0 and we have PRV where was bought on that price.
We add liquidity, pairing PRV/USDT 50:50
Our asset :
1000 PRV x 4 Usdt = 4000 usdt
4000 USDT
Total Value of our asset are 8000 usdt.
Advantage & Disadvantage asf:
A. PRICE UP
For example. Prv price is up become $6 usdt per PRV. 50% up.
Then,somebody SELLING sum of his prv = 100 PRV. Meaning he give us , his 100 PRV and we give him 600 USDT.
Our asset become 1100 PRV and 3400 USDT ( Total value our asset become 1100*6 + 3400 Usdt = 10,000 USDT , profit 2000 usdt. 25% only.
Comparison : If we hold in PRV not within liquidity or not include USDT all in PRV, so our asset value are 2000 PRV * 6 USDT = 12,000 USDT . 50% profit.
We dont get another 50% opportunity, sum of $4000 profit ( 12,000 - 8,000 = 4000 USDT). Because in pDEX we get profit 2000 usdt only ( 10,000 - 8000 = 2000 usdt )
B. PRICE DOWN
For example. Prv price is DOWN become $2 usdt per PRV. 50% down.
Then,somebody SELLING sum of his prv = 100 PRV. Meaning he give us , his 100 PRV and we give him 200 USDT.
Our asset become 1100 PRV and 3800 USDT ( Total value our asset become 1100*2 + 3800 Usdt = 6,000 USDT , lose value 2000 usdt only ( 8000-6000 =2000 usdt ). 25% lose only.
Comparison : If we hold in PRV, not within liquidity or not include usdt, so our asset value become 2000 PRV * 2 USDT = 4,000 USDT . Lose 4000 Usdt ( 8000-4000=4000 Usdt ). Lose 50%.
So by adding liquidity in pDEX ,we PREVENT lose another 25% , sum of $2000 LOSE ( 6,000 - 4,000 = 2000 USDT) only.
From above simple case.
Adding liquidity on pDEX is such as share 50% lose & 50% profit.
If price goes up , we will not getting 50% opportunity profit but 25% only.
If price goes down , we protect our asset value from 50% of Lose value. We lose 25% only.
If looking into present liquidity reward is around 16% apy. And spread price between selling & buying price are around 2%.
Let say, it is accour yearly.
If prv price up 50% , we get around 25+16+2 = 48% profit
If prv price down 50%, we get lose 25-16-2 = 7% only.
Adding liquidity is still well strategy. As at any time we can withdraw our asset.
Staking pool, required around 1 up to 3 days if huge wd request.
Vnode/pNode stake. To unstake required more than 30 days
" if any wrong calculation please comment and corrected "