Here's Exactly How Much You LOST by Selling LOAN (Opportunity Cost)

Since Liquid Loans launched, many users have forfeited their LOAN tokens to the open market. 

But by doing so, they have missed out on the opportunity to earn hefty returns from the Staking Pool.

I have the numbers right in front of me, and they tell a pretty shocking story.

I’m going to show you exactly how much an average user would have missed out on by selling.

This article is part of the Chain Reactions series: expert opinions on everything blockchain and crypto.

Assumptions

Let’s start with some assumptions in order to estimate how much you might have lost.

For instance, let’s assume a user would have maintained their stake  to have a 0.1% share of the LOAN Staking Pool.

While this would be difficult to consistently maintain without fluctuation, using this as an assumption will allow us to estimate these average losses.

The average total value of the LOAN Staking Pool across the life of Liquid Loans has been roughly 6.25 Million USD worth of LOAN.

This means that a user would need roughly 6,250 USD worth of LOAN over this time period to maintain 0.1% pool share, which is an attainable amount for the average user.

With that out of the way, let’s dive into the fun part.

How Much You Missed Out On

Let’s say that, rather than stake their LOANS, this user decided to sell them or leave them accruing dust in their wallet.

Well, the LOAN Staking Pool earned 923,036 USDL and 4.9 Billion PLS from Dec 1st, 2023 to April 16th, 2024…

This means that this user lost out on $923 USDL and 4.9 Million PLS!

Worst of all, this is money they could have earned by staking and waiting around. 

During this time period, the average price of PLS was $0.0001 USD.

This means that they lost out on $490 USD worth of PLS that they could have earned for doing virtually nothing.

Including the USDL they lost as well, they missed out on the easiest $1,403 of all time.

In total, they missed out on a passive return of 22.6% in just 136 days. 

Annualized, this would be a return of 60.7%.

What You Could Miss Out On in the Future

These returns are likely to continue as more and more users pour into PulseChain, especially as the chain is still in its first year.

As more users adopt PulseChain, more PLS will be collateralized by Liquid Loans. This will lead to greater volumes of borrowing fees in USDL.

If the price of PLS rises, more and more PLS value will be distributed to passive stakers.

And, if the price of the LOAN token rises, it will become harder and harder to maintain a pool share of 0.1%.

Liquid Loans is still a very young protocol. In fact, it’s not even 150 days old. Yet, there are more Vaults open than on Liquity (which is based on Ethereum!).

If PulseChain captures even a fraction of Ethereum’s popularity, anyone in the LOAN Staking Pool will be very glad that they held onto their LOAN tokens.

We’re talking about the opportunity to build massive returns by doing virtually nothing.

Check out the Liquid Loans DApp to learn more about how you can start passively earning by participating in the Staking Pool.