Provide liquidity to help Bingus float

This is a keen request to the Bingus community

This is not financial advice. This is purely educational. I am a professional academic. Welcome to school with Dr Jamie.

What is liquidity

Liquidity is the ability to buy and sell an asset without affecting the price. On a decentralized exchange (DEX) like Apeswap or Pancakeswap, this means having a large amount of Bingus in the liquidity pool so that when one Bingus is removed or added, it is barely noticeable.

A centralized exchange (CEX) like Binance has huge trading volume (buys and sells), and so they do not suffer with liquidity issues. Though they would if everyone tried to withdraw from the exchange. I wonder what would happen if everyone tried to withdraw..?

Let us discuss the problem

Bingus is a community coin. There is no reserve Bingus held in a secret place to for later, it is all out there in private hands. So when someone wants to buy, it must come from liquidity. At the moment, the only non-custodial Bingus is the initial amount sent to be locked into Pancakeswap, though this is slowly being bought up by the community.

OK, envisage the time when every single Bingus is owned by someone. What now happens if none of us will sell and there is no Bingus left to go around..? “It will moon! Supply and demand, we all know how it is…” or you might think… WRONG. It will die!. We are not some tangible asset offering a use-case with enough renown to survive such market illiquidity, like property, for example. If someone cannot buy Bingus, they are unlikely to start offering higher and higher prices because the market is illiquid (e.g. no buys/sells). Besides, who could they even buy from? When a crypto gets to the stage where a sell is required to make a purchase, and there is not a monstrous demand (like there is for Bitcoin, for example), then that crypto becomes dead ass a dead asset.

“OMG Jamie, what are you saying, will Bingus die!?” GET OUT OF HERE WITH YOUR PAPER HANDS. OF COURSE IT WON’T DIE. This is because there are perfectly amazing mechanisms to help Bingus by becoming Liquidity Providers (LP). Yaay!

Bingus needs liquidity provers. LPs will only come from the community (and also from those highly intelligent beings who know how to make money but don’t care which coin does it for them). Without LPs, Bingus will suffer; without LPs, ANY coin would suffer. Why? Because when a whales dumps on a coin, if the liquidity pool is too small, that coin would become worthless. This is also true for when whales buy, however, we have already discussed what happens if all the Bingus is gone. Sure it will moon, but paper profits mean nothing until it is in your hand, and an as soon as you try sell into a pool with no Bingus, you will find you cannot get any of those profits out.

BINGUS NEEDS YOU

Ok. so you are convinced that this is important. Good. It is.

Providing liquidity keeps a project healthy. But what does it mean to provide liquidity? Let me explain what a “coin-pair” is. A coin pair is what you trade on a DEX or CEX, BINGUS has a BNB coin pair, meaning only BNB is sold to buy BINGUS, vice versa. Even if you went on Apeswap and paid in CUMROCKET for your BINGUS (smart move), the transaction behind the scenes goes CUMROCKET->BNB->BINGUS. That final trade is executed on the BNB-BINGUS coin pair.

What is providing liquidity

I will get into why you would add liquidity beyond helping the coin for here wanting to ride Bingus to the moon (nothing wrong with that), but first, let us clarify how it works.

To provide liquidity, you must add to the BNB-BINGUS coin pair pool. This means adding equal parts of BNB and BINGUS in dollar value.

Right now, 1 BNB = 55512100 BINGUS = $670. So to add LP here, you would have to deposit both 1 BNB AND 55512100 Bingus (e.g. $670 x 2 = $1340 worth). You can add less. You can add more. When you deposit your BNB-BINGUS pair, you are given a “receipt” called a LP Token. For Apeswap, this has the catchy name of BNB-BINGUS APE LP token. These tokens entitle you to a percentage of the pool. When you cash in your LP token, you withdraw that percentage of the pool. The pool BNB:BINGUS ratio can and will change.

That’s it. Liquidity added (I will get onto the “how to” later).

So what happens with your tokens now? Well, they are used to facilitate buys and sells of Bingus. When the BNB-BINGUS coin-pair ratio is 1:55512100, your coins stay exactly the same when you withdraw. However, if someone sells Bingus, there would be more Bingus in the pool, and less BNB (because someone deposited Bingus and withdrew BNB during the transaction). This also means the BNB went up in value and the Bingus went down in value. If you were to cash in your LP token now, you get the same percentage as you deposited, only this time, because the ratio of BNB-BINGUS has changed, you receive different amounts of tokens.

Impermanent loss (IL) is the opportunity cost difference between (i) the value if you had just HODL your tokens, and (ii) the new value of your tokens due to changes in the ratio. IL is more severe as one token changes value faster than the other. If this is still confusing, get on the Binance academy and do some watching until it makes sense. This one of the major risks of providing liquidity. Thankfully, there are yield farms, and these adequately make up for the loss, and then some. As a thank you for providing liquidity, a small proportion of every transaction is paid to the LPs.

I am telling you that you will lose money to impermanent loss for providing liquidity for BNB-BINGUS on Apeswap. I am also telling you that you will make money from transaction fees and yield farming on TakoDefi. I am also, also telling you that by not providing LP, Bingus’ survival as a project becomes more and more compromised. We need everyone to do this act of generosity so that the token thrives and animals survive.

The benefits of providing liquidity

There are two reasons.

First and foremost, it helps the project you love survive. If the project survives, Bingus will go up in value.

Second, and also basically foremost, you can earn decent money doing it! By putting your APE LP tokens into the yield farm on TakoDefi, you get paid anywhere from 250+% a year, paid out in Tako, their native token (which you can sell for cash, or Bingus, or stake further to compound your earnings!).

The yield farm pays out a consistent percentage in Tako, proportional to the value of your LP. The reward reduces as more and more people join the LP.

The Tako pool also pays out a consistent percentage in Tako, proportional to the amount of Tako in the pool. There are aslo Bermudas (similar to a pool, but more complicated and decent reward. These are one off events though).

So let us take an example * You deposit $200 worth of BNB-BINGUS and receive your LP tokens. * You take the LP tokens and deposit into the TakoDefi BNB-BINGUS LP farm, offering 300% APR (a 3% tax is applied to deposit this, so $194 goes in). * Each day, you will receive 300% / 365 days = 0.82%, every day. This is $1.60 in Tako. * At the end of the month, you have around $50. This scales proportionally with the deposited amount, so $1000 would give you $250 each month in Tako (assuming constant APR). * But the gains don’t stop there. There is a Tako pool. A pool is just conventional staking where you deposit only Tako and earn Tako at a rate of around 200-300% APR. * When your Tako from the farm has reached >$20, it is time to harvest it. - It costs about $1.20 to remove it, so don’t do it earlier than $20 else you really reduce your gains. * Deposit the Tako into the Tako pool. Your $20 will earn 250% / 365 days = 0.69% (nice) daily, which is $4.20 a month (double nice). - This sounds small. But this is ONLY the beginning. Because the next $20 from the LP that you deposit, you are at $8.20 a month etc.

Let us look at a simple example where we have constant APR and only harvest at the end of the month. We have our $50 a month from $200 invested. We then put the profits from LP farm into the Tako pool. The Tako pool is then compounded monthly.

Month	Earned from LP farm (300%)	Value of Tako in the pool	Earned from Tako pool (250%)
1	$50	$0	$0
2	$50	$50	$10.42
3	$50	$110.42	$23.00
4	$50	$183.42	$38.21
5	$50	$271.63	$56.89
6	$50	$378.22	$78.80
7	$50	$507.02	$105.63
8	$50	$662.65	$138.05
9	$50	$850.70	$177.23
10	$50	$1,077.93	$224.57
11	$50	$1,352.50	$281.77
12	$50	$1,684.27	$350.89

So at the end of the year, there would be $50 + $1,684.27 + $350.89 = $2,085.16. Not bad for your $200.

Now let me be clear. This is a sub-optimal strategy.

The best gains come from harvesting and compounding every time there is $20-30 dollars. Also Tako could boom. Double nice. You could lose 25% of your $200 to IL, but you still made a 10x by being diligent and consistent with your farms.

I personally have 66% of all my Bingus inside the LP yield farm. When Bingus booms, the IL will be high. BUT, I am making around $6 an hour. Every hour. That is a cool $4,380 a month, and it compounds! YOU’RE GOD DAMN RIGHT ITS AMAZING.

I only put 66% in because I want a 33% HODL bag, AND THERE IS NOTHING WRONG WITH THAT. Don’t yeet it all in. Besides, it has risks. TakoDefi could be hacked… But also so can Trustwallet or Binance.

Now go out, help Bingus, and make them gainz.

How to gainz

1. Through your wallet DApp, navigate to Apeswap>Trade>Liquidity and deposit equal amounts of BNB and BINGUS.

   • For the love of god, save some BNB for gas, I always keep $20 in reserve.

2. You now have LP tokens. They won’t auto show in your wallet, but who cares. They aren’t living in your wallet. Take those LP tokens to takodefi.com/farms through your wallet DApp.

3. Deposit those LP tokens into the farm and relax. Tako will slowly start to rain.

4. When $20+ has accrued. Harvest. Tako is now in your wallet (use Tako contract address to manually add, if you wanna see them in the wallet)

5. Go to Takodefi.com/pools through your wallet dapp. Deposit your Tako into the pool.

6. If the Tako pool ever has $20 in, compound (this automatically adds the farmed Tako to the Tako pool).

7. Repeat steps 4, 5, 6 until you’re rich.

8. Removing LP, follow steps 1-3 in reverse.

thanks for coming to my ted talk