The Tomb Fork Saga : Chapter 4
LP stakers vs Share stakers
As we discovered yesterday, vampcoins are already among us. The first of them all was Tomb.Finance. As many forks are popping in many blockchains, we can spend some time thinking about incentives and competing strategies when you are using one of them.
LP stakers vs Share stakers: the battle of vampires
The pain of being an LP Staker
When you first try to use a vampcoin, if you follow their tutorials, you first need to be a liquidity provider on the TOMB-FTM pair. So you:
- have to swap some native token from FTM to TOMB
- put an equal part of TOMB and FTM token in a liquidity pool
- “stake” your LP tokens in the cemetery.
This is necessary for the whole machinery to work. For this effort, you get rewarded with the SHARE token. The SHARE token has a pretty good value in itself, so in the end, you get a roughly 115% APR reward (paid in TSHARE).
The cemetery gets you a pretty APR
Once you have been rewarded with TSHARE, then you can either sell them to take profit (I wouldn’t do that), or simply stake them in the masonry.
For this simple and easy action, you get rewarded in TOMB with an insane APR. Here 800%, but yesterday it was more around 400% (paid in TOMB). It can fluctuate. In case for example, there are still TBONDs to redeem, most of what the masonry is printing, goes to redeem TBONDs.
But the Masonry is much better
The SHARE only strategy?
Simply looking at these above stats, SHAREs look much more rewarding, and we could go for a simple strategy: never bother contributing to liquidity pools, just buy SHAREs and get a 800% APR passive income paid in TOMB.
Each time you harvest your passive income in TOMB, just sell the TOMBs on SpookySwap.
Surely, this is a strategy that we should consider, but, don’t forget that:
- TSHARE APR seems to vary a lot (it was more around 400% these last few days and have suddenly jumped to 800%)
- When TOMB is under-peg, TSHARE earn you nothing
- Staking LP tokens and the cimetery gives you some reward, but the LP tokens in themselves, are a reward: LP tokens appreciate in value, because they accumulate de fees that are paid by people trading on the FTM-TOMB pair.
So, the SHARE only looks interesting, but maybe not in all the situations. We’ll just keep in mind that this is a strategy that can be played.
We’ll also keep in mind that it is the LP Stakers that do the dirty work: they provide de liquidity, and without them, there would be no TOMB-FTM pair to trade with.
In the next article, we’ll have a look at what’s going on at 2omb Finance, as 2omb has been over peg for a few days … and is still rising!!!