The top five liquidity trackers and analytic tools

In this article, guest author Julian Richter from Tangany writes about the top five liquidity pool trackers and their different properties.

Managing liquidity pools (LPs) is in general a time-consuming and usually tiresome task. You need to stay up to date in the fast-moving liquidity pools ecosystem. Liquidity pool trackers and analytic services make your life easier by helping you to make better LP decisions and help you to manage your LP exposure! Below, you will find the best five liquidity pool trackers and analytic tools of 2022.

Liquidity providing can bring you attractive returns, but we recommend learning (check this video) everything about LPs before using your funds.

What is a liquidity pool (LP)?

In a decentralized world the liquidity for financial assets and the market making service will be not provided by a central entity. In the upcoming DeFi ecosystem the liquidity for digital assets come from liquidity pools. These liquidity pools are the trading pairs on automated market makers (AMMs), they are creating a liquid market.

How does liquidity providing work? Active DeFi users deposit two tokens of equal value. E.g. 50% TerraUSD (UST, the stablecoin of the Terra ecosystem) and 50% Ethereum (ETH) into the UST/ETH pool to add liquidity. You add the liquidity by managing your wallet and signing a transaction and deposit your 50%/50% token value to the pool. The pool is an automated smart contract structure.

When we talk about liquidity in liquidity pools the parameter total value locked (TVL) is important, it shows the value of tokens that are locked within liquidity pools.

You can check the TVL on DeFiLlama. The current TVL (08.01.2022) is at 233 billion USD and growing on a constant basis.

Figure 1: DeFiLlama dashboard (Source: https://defillama.com/)

The more liquidity a pool receives from different LPs, the more liquidity is aggregated in the pool which reduces the slippage of the trading pair. Slippage is the difference between the expected price of the trade and the price when the trade gets executed.

Some of the Automated Money Markets (AMMs) allow the active users to deposit more than two tokens, e.g. Balancer.

What can you earn by providing liquidity? The reward for providing liquidity is a percentage of the trading fees relative to your share of the pool, e.g. 0,3 percent trading fees. In some cases, AMMs will incentivize users with their governance token. The governance token is the native protocol token and it is distributed to the LPs. For example, LPs of Balancer earn with their collected fees $BAL tokens. These two components create your LP returns.

DezentralizedFinance.com is a huge fan of the liquidity pool ecosystem and we recommend that you should learn about liquidity providing and liquidity pools, we believe it will be a hot topic for the next 10 years.

What is a liquidity pool (LP) tracking and analytics service?

A liquidity pool data analytics and tracking tool will track the performance (APY and APR), returns and risk data of different liquidity pools or your active liquidity pool deposits. In most cases, the liquidity pool tracking services provide analytics features. The returns of liquidity pools are changing by the minute, be aware that you need to check our position regularly. Read also our risk disclaimer, as liquidity providing can be very risky.

APY.vision

APY.vision: All-in-one liquidity pool analytics and yield farming rewards tracking tool. Find the most profitable liquidity pools, calculate liquidity pool performance, impermanent losses and track yield farming rewards in one place. APY.Vision offers a two-tiered dashboard to manage your liquidity pools. APY.vision offers different AMMs.

Figure 2: APY.vision dashboard (Source: https://app.apy.vision/)

Pools.fyi

In Pools.yfi you can find the top liquidity pools across a range of different Automated Money Markets (AMM) with your liquidity positions. Anyone can start earning trading fees on exchange platforms like Uniswap today by being a liquidity provider. Pools fully distribute trading fees to liquidity providers. As a liquidity provider, you add a specific ratio of assets to help faciliate trades in the pool. Doing so gives you an ownership share of the pool and the future trading fees it generates.

Figure 3: Pools.yfi dashboard (Source: https://pools.fyi/#/de/)

Yieldmonitor.io

Instant on-chain DeFi data. Multi-chain asset price, volume, trading, and portfolio tracking data for DeFi investors and traders. Institutional-grade database and analytics dashboard toolkit for DeFi product teams and developers. Yield Monitor’s high-powered database feeds on-chain data directly to users and DeFi platforms to keep financial products running smoothly and accurately. Upcoming user analytics tooling will enable builders to offer improved customer experiences.

Figure 4: Yieldmonitor.io dashboard (Source: https://www.yieldmonitor.io/)

Yieldshield.com

YieldShield is an automatic and secure yield farming optimization service, built on the Yield Protocol toolset. We deploy smart contracts and AI in a very simple and intuitive user interface, allowing anyone to easily yield farm safely. Our robo-farmer maximizes users’ returns, based on their risk-level settings.

Figure 5: Yieldshield.com dashboard (Source: https://www.yieldshield.com/)

Revert.Finance

Revert Finance: Actionable analytics for DeFi liquidity providers. Revert Finance Liquidity Pools analytics.

Figure 6: Revert.finance dashboard (Source: https://revert.finance/)

Summary — liquidity pool (LPs) trackers and analytic tools

In this article, we shared the top five liquidity pool (LPs) trackers and analytic service providers. By using these LP analytic tools and tracking services, you can improve your liquidity pool knowledge and hopefully make better liquidity pool decisions.

We hope this article helps you with your research about liquidity pools and liquidity pool tracking services and data analytic tools.

Remarks

This article was originally published as a blog post on dezentralizedfinance.com. You can find the original article here.

If you like this article, we would be happy if you forward it to your colleagues or share it on social networks. More information about the International Token Standardization Association can be found on the Internet, on Twitter, or on LinkedIn.

Julian Richter is head of sales and business development at Tangany, a regulated german-based white-label custodian for digital assets (wallet-as-a-service). Moreover, he runs the DeFi information portal www.dezentralizedfinance.com and is excited about DeFi, Web 3.0, blockchain industry databases & maps and B2B networking. You can contact Julian via Twitter and connect with him on Linkedin.

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International Token Standardization Association

The International Token Standardization Association (ITSA) is a not for profit organization working on holistic market standards for the global token economy.