Today's notes: LP is not arbitrage In order to cure my laziness, I joined 'Arbitrage Cruelty Co learning'. A few days ago, I conducted a preliminary study on the DEX bilateral arbitrage path on the Solana chain, collected some data, and came to the conclusion that it is temporarily put on hold. The reason is that this matter is quite complex and requires careful study in order to have a chance. I attended an online arbitrage sharing session two days ago. At the end of the meeting, someone mentioned LP (liquidity mining) and gave some presentations. It seems that many people are interested, and there are many newcomers. Then let's take this opportunity to say a few more words, after all, in the field of LP, we have also accumulated a little experience. Firstly, LP is not arbitrage at all. Unless you engage in hedging, such as ETH/USDT group LP, and dynamically hedge your ETH position. Note that it is a dynamic hedge, as your ETH is constantly changing. But in reality, doing so is almost not worth the loss. Because of: capital utilization rate, hedging efficiency. Most of them are still MEME token LPs on the chain. The market value varies, for example, some people can get a few hundred million, while others need tens of millions of market value to dare to enter. Because it is necessary to balance risk and return. LP returns come from volatility, and the earlier and shallower the pool, the greater the volatility and the higher the risk, even the risk of withdrawing from the pool, running away, and hitting the market to zero. So, LP is not arbitrage, but high-risk speculation. Its level of risk is second only to buying and selling MEME coins directly. 2： LP risk is slightly lower than buying and selling MEME coins. Why? Two points: 1. LP has commission income as a protective cushion 2. LPs usually buy memes and native tokens (such as SOL, ETH, BNB) in half A MEME coin that fluctuates within a certain range and almost never rises, if you form an LP, it may be profitable; A MEME coin that has been skyrocketing all the way, if you form an LP, it is almost certain to outperform those who buy coins directly. 3： Impermanence and loss are not that important I have found that the more novice you are, the more you hear about LP, the more you will say: impermanent loss. Perhaps it's to make oneself appear more professional. But actually, what you said actually exposed the problem. As an 'academic concept', this thing is useless on your LP's way to make money. Not to mention that many people may not even understand the precise concept of "impermanent loss" and use it to deceive others. What you want is to make money from LP, not to argue with others about how to avoid impermanent losses. It's unavoidable, brother. It is almost impossible for you to expect to earn commission income from LP without any risk. Died this heart early. Let's talk about so much for now, it can be considered as today's shared learning notes. From now on, just post your daily study notes on Twitter and let's learn together.