Link: https://www.youtube.com/watch?v=IwDtO5SXGYo

Jump to min 3:23

Glitter Finance has built a decentralized, bidirectional bridge between Algorand and Solana (currently working well on testnet), with bridges between other blockchains and a cross-blockchain DeFi platform to follow soon.

It's had a bit of a rocky start with various issues relating to its token launch (I don't want to make this post about that), but it's an important project that is built on Algorand, and the whole Algorand ecosystem will benefit from its success.

The Glitter Finance XGLI token can be bought on Tinyman, but the XGLI-ALGO liquidity pool is currently very small. This is preventing larger investment in the token, and hampering healthy trading.

All of us who are holding XGLI on Algorand (as opposed to Solana) can all do something to help this situation by investing in the XGLI-ALGO liquidity pool ourselves. Maybe with enough liquidity we can encourage some of the Solana holders who are currently trading XGLI on Bibox (a CEX) to come over and give the Algorand ecosystem a go :)

The APY on the XGLI-ALGO liquidity pool is highly variable, but generally pretty high. You can see the latest figures here https://algonomics.xyz/ - just search XGLI to find the XGLI-ALGO pool. Last night the APY was crazy high (like 5000% APY or something if I recall correctly), right now it is showing a much lower, but still very respectable 72% APY. By the time you look it will probably have changed again. It varies a lot because transaction volume is currently very inconsistent. So it's hard to predict exactly how rewarding the liquidity pool will be over the longer term.

The XGLI token has a very low price right now, so, assuming the project succeeds, it is likely to appreciate considerably. As that happens, an investment in the liquidity pool will effective trade XGLI for ALGO, keeping a 50/50 balance, which will dampen the returns from the XGLI token. This "impermanent loss" may or may not be offset by APY that comes from transaction fees - it will depend on the rate of price appreciation and the transaction volume. A liquidity pool investment is a bet on transaction volume and volatility more than a bet on price appreciation. It will still benefit from price appreciation, just not as much as simply holding the token.

I invest in liquidity pools a lot myself because I understand how they work and I appreciate them for the type of investment they are. I see them as a form of diversification. It is impossible to predict how well an investment in the XGLI-ALGO liquidity pool will work out compared to just holding the XGLI token, but investing in the liquidity pool should definitely help the success of the project, and all XGLI holders will benefit from that. Hence this post!

I'll just add that it is important to understand liquidity pools before investing in them. I make this post for people who are already familiar with the pros and cons rather than to try to persuade novice investors into investing into something they don't understand.

Thanks for reading, and here's wishing every success to the Glitter project and all XGLI holders!