Now I'm pretty sure that any veterans on this board are going to look at this post and go "Why would he bother telling that, its so obvious! Never pay more for your crypto".
However, in my community #earn spend give I've had everyone using hive-engine to sell their GLD coins when they could have gotten a much better deal using the Tribaldex liquidity pool.
So, for @emreal and anyone else who might want to know how to get a little better deal on buying and selling their coins on HIVE I've written this little post.
But I'll start with a question: Are you trading old school with a buy and sell ledger? Or are you trading new wave where computer algorithm determines where the buy and sell price should be? Do you want to wait for a buyer to come for your coins or do you want a 24/7 buyer/seller to makes sure everyone can buy and sell? Do you want an order entry system (Hive-engine) or a liquidity pool (Tribaldex)?
Image Source: Dall-E
Hive-Engine
Now the Hive-engine is easily the most common and easily understood way to sell your crypto (or buy it) but it can still be confusing to start. I'm going to show you the AFIT-HIVE trading pair on the Hive engine because I'm actively buying AFIT.
If you look right now I'll have to spend 2.248 Hive to get 5000 AFIT tokens.
Why is that? Well, the top person I can buy from (the seller) is selling 7409 AFIT at a price of 0.00044968 HIVE for each AFIT. Using that number 5000 AFIT cost 2.248 HIVE. Alternatively if I wanted to SELL 5000 AFIT tokens I'd have to look at the best buyer who is buying at 0.00038342 Hive per AFIT. If you look at the SELL it looks like this:
At first glance it looks like I'd only get 1.9171 HIVE if I were to sell my 5000 AFIT. That's a pretty big difference between the buy and sell numbers. To make things even worse I'd only be ble to sell 0.32709 HIVE worth of AFIT before I'd have to go to an even cheaper buyer!
In short... This is a great place to make an offer to buy (or sell) and HOPE that someone comes along to meet that offer. However, if you just want to buy or sell without waiting for someone to come along and place an order, well, that's where the Tribaldex pool comes in.
Tribaldex Liquidity Pool
If I was to buy those same AFIT tokens on Tribaldex I'd pay 2.01 Hive for those same 5000 AFIT tokens which is a savings of almost 10%. Even better, while I'm guaranteed 5000 tokens I'd likely get even more!
But what if I wanted to sell my 5000 AFIT tokens? Will I get better than the 1.917 Hive I'd get from Hive-Engine? Let's take a look?
The answer is YES, I would absolutely get more for my tokens! Instead of 1.917 I'd get at least 1.971 and likely 1.981 tokens. That means 0.054 more tokens in my pocket. May not seem like much but its still a savings of 3%. Why pay 3% more than you have to?
How do liquidity pools work?
The difference between an order entry (hive-engine) and liquidity pool (tribaldex) is that in a liquidity pool people put in both HIVE and AFIT (or other pair) and they let a computer algorithm do the buying and selling for them. The computer tightens the spread covers all the buying and selling and adjusts the price according to demand.
It works GREAT for small amounts of coins going back and forth between currencies. However, liquidity pools typically aren't that large and making a big order on a small pool can throw off the price in a major way.
Let's look at the AFIT pool :
There is only $681 worth of money in the pool. Not that large. However, that pool has made over $41,000 worth of trades back and forth in the currency!
Look a little closer and you will see that the pool has 890 Hive and 2,235,728 AFIT tokens. So it has HIVE to give you if you are selling AFIT and AFIT to give you if you are selling Hive.
What's the limitation? Well, lets see what happens if I try to sell 1,000,000 Hive! Things are going to look ugly :)
Summing things up
Now I am responsible for adding liquidity on the buy and sell side for the GLD token on the hive-engine. I am also responsible for setting up the liquidity pool for HIVE : GLD on tribaldex. I think both are extremely useful but for a casual buy and sell...
Please use Tribaldex and get a better deal :)
Or drop me a line and explain why I've got it wrong ;)
Thanks for reading!
...and side note: tag me (@terganftp) and send a reply and I'll send along some GLD tokens in a week or so (maybe faster I do it manually). Better reply, better payout...(up to 100GLD max).
Then you can check this out for yourself with a coin you didn't pay for 😉