DeFi guide

LP vs HODL

LP vs HODL compares a liquidity provider position with the simpler outcome of holding the original tokens outside the pool. The comparison is useful because an LP position changes token balances as trades move the pool price.

This page will cover the core scenarios: price divergence, fee income, stablecoin pairs, volatile pairs and the difference between gross LP value and net value after costs. The examples are illustrative and do not predict returns.