[PSA] Those entering the AMM liquidity pools for the first time need to pay attention to the entry and exit fees.

LoopringLoopring
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self.loopringorg2m ago
It really is great to see so many people interested in the AMM pools, especially with the upcoming loophead drop associated with it, but before we get too excited I feel I needed to bring some awareness to just how expensive the fees are for these pools. While the fees for swaps/trades between currencies is so negligible you don't notice ($0.10ish), fees to enter AMM liquidity pools are orders of magnitude larger. If you want to enter the pool you'll pay anywhere between $2.00 and $25, and you'll pay the same fee when you want to remove your coins from the pool. If you don't want to lose money you have to plan your strategies around the exorbitant cost of the AMM entry/exit fees. If you only have the 'minimum' to invest in these pools then it is imperative you find a time when fees are low (from my short lived experience under $5.00 is considered low), and once you're in the pool you need to plan extremely long term so the fees you earn from the AMM contracts offset the fees it cost you to enter. If you have a larger sum to play with then this info will still be helpful but a lot less pertinent since the larger investment will help you offset the entry/exit fees a lot sooner. I personally have been shooting to make the entry/exit fees less than 1% of my total cost (e.g. if the fee is $5.00 then I'll try and invest $500+ so my fee is less than 1%). And since you're paying the fee every time you enter/exit it is much more worthwhile to build your positions in coins slowly then enter the AMM all at once so you avoid paying multiple entry fees (this is less important the larger your positions are). I'm sure there is much more I'm missing here, but a lot of us are used to zero commission/fee brokerages so readjusting to fees/gas everywhere takes time and from some of the posts I've been seeing on the sub, it seems like this issue could use more attention. If you have any additional questions I'd be happy to help, though since I'm also very new to this I cannot guarantee I'll know how to answer.