Can I avoid impermanent loss if I only stake ETH as a LP of BETH/ETH in Binance？ Is BETH's price stable？
If I don't want to hold any crypto assets except ETH，what are the best DEFI options to improve profit？
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2 Answers
Binance documentation describes the BETH/ETH pair.
In short, this pool is less exposed to impermanent loss because the relative volatility between BETH and ETH is much lower than for something like ETH and BUSD. In other words, the price of ETH and BETH should generally remain in a small price range, so the effects of impermanent loss are mild.
Is BETH's price stable？
If you go to the BETH/ETH market on Binance, you’ll see that BETH doesn’t trade at a 1:1 ratio with ETH – even though each BETH represents 1 staked ETH. Why is that? Well, the short answer is, they aren’t the same asset. Price discovery between BETH and ETH is completely up to the market. Remember, BETH is a tokenized version of staked ETH.
As such, BETH has different implications than ETH. The fact that it’s trading at a different price means that the market is pricing those qualities differently than ETH. BETH currently can’t be redeemed for ETH, which means there’s less flexibility to it than ETH. At the same time, it entitles the holder to staking rewards.
Q: If I don't want to hold any crypto assets except ETH，what is the best DEFI options to improve profit？
A: Probably staking ETH and/or providing liquidity to a pair of staked ether and ether (like BETH/ETH).
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Thanks for answer the question and edit the question to make it clear！ Commented May 15, 2021 at 5:20
Hi I am a liquidity provider on Binance with the Beth/Eth pair. I am rather surprised at how high my loss is if I were to withdraw which currently stands at -131 usd which is quite a lot for a 872 usd (beth/eth equiv) share. Because of the low volatility I wasn't expecting to be losing out like this - so beware ! (The split is 0.1777 eth + 0.187 beth)
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hmm why are you mentioning usd? How much beth and eth did you put in, and what did you get back when you withdrew?– eth ♦Commented Jun 12, 2021 at 8:44
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hmmm, why are you even asking ??(The split is 0.1777 eth + 0.187 beth) We are talking about impermanent loss - that infers I haven't withdrawn. Try to understand what you are talking about before making comments. I mentioned Usd as a rule of thumb (hence equiv!) and this is how profit/loss is displayed on this platform. Try not to get confused about that, I put in Beth and Eth! Please read it more carefully. (it has fluctuated to just - 15 usd but is back up to over - 100usd equiv now) –– ericCommented Jun 14, 2021 at 14:40
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@eric "Try to understand what you are talking about before making comments." I suggest you check the profile of the person who commented this, because I am quite sure he knows more about Ethereum than anyone else on this forum. Commented Jun 14, 2021 at 20:01
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That says a lot about this forum! I dont need to waste my time checking someone out when they are saying dumb s##t. Should have known not to bother with this anal retentive forum. Small minded time wasters.– ericCommented Jun 16, 2021 at 6:42
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Thank you for updating your question Eric (you didn't mention split or have the picture before). Sorry you felt my first comment was aggressive. I have not used that site so can only guess what Market-making PNL means. I think technically you will always have some IL unless the price ratio is identical as when you deposited. But the IL can be offset by the amount of trading fees you have gained. I can only guess that the red in your picture means your IL is more than the trading fees you got. Please feel free to post your question anew. Others may know better & might be able to help you more.– eth ♦Commented Jun 19, 2021 at 5:44