Using the Stablecoin in a LP pairing as a cashflow asset?

General question about LP farms, i’ve managed to wrap my head around IL but I’m think of utilising LPs as more of a cashflow asset and was wondering if this would be effective for a monthly passive income type thing. E.g. put 25,000usd split in a LUNA-UST pairing @86.9% APY, the UST would still amass 10,862.5$ over the course of the year.

Obviously, the APY isn’t going to remain the same over the whole year but should still remain very high as far as ROI goes. Would this still be effective with monthly removals for bills and am i forgetting anything that may be relevant?

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6 thoughts on “Using the Stablecoin in a LP pairing as a cashflow asset?”

  1. You kinda hinted on IL but you didn’t take it into consideration for your calculation.
    If Luna falls some of that 12500 UST is gonna be “sold” to buy Luna in order to keep your pool 50-50. So the UST will no longer be making 10862 even if APY stays the same.

    The good news however is that you also get the APY on the Luna.

    And fyi I’m in a number of pools for exactly the reason mention….. cash flow/passive income

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  2. Luna drops you’ll lose. Luna goes up you’ll gain less.

    You get the higher yield for this risk.

    Personally I prefer pairing cryptos that at least have a chance to move together. Like ETH-Matic or maybe FTM, avax, WBTC mixed in there.

    If you want reliable monthly money, you can pair stablecoins and get 10-20%

    That said. The 86% is attention grabbing.

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  3. Where are you seeing that APY? LUNA-UST is my favorite trade but I don’t see nearly that. Best is Osmosis which is like 61%

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