You can purchase $BMI and participate in staking on SushiSwap, a multi-product DeFi platform. SushiSwap allows users to earn 2x rewards for depositing and keeping the required cryptocurrencies on the SushiSwap platform.
How can I participate in Bridge Mutual (BMI) farm on SushiSwap as a new user?
First, you’ll need some BMI and ETH (or wETH) in your wallet. You can buy BMI here, on SushiSwap.
Secondly, you’ll need to provide both ETH (wETH) and BMI to the BMI pool. You can do it here.
In exchange for providing ETH (or wETH) and BMI to the liquidity pool, you’ll receive SLP tokens.
Head to the SushiSwap application and press the “Farm” tab.
Search for the “BMI/WETH” pool and click on it.
Press the “Staking” tab and stake SLP tokens to receive SUSHI token rewards. You’re all set.
What is impermanent loss?
According to CoinMarketCap, impermanent loss is the temporary loss of funds occasionally experienced by liquidity providers because of volatility in a trading pair.
Liquidity pools often feature two assets — and while one might be a stablecoin such as DAI, the other could be a more volatile cryptocurrency such as ETH. Let’s imagine that a provider needs to offer equal levels of liquidity in both DAI and ETH — but suddenly, the price of ETH goes up. This creates an irresistible opportunity for arbitrage, because the price of ETH in the liquidity pool now doesn’t reflect what’s going on in the real world. To ensure the ratio of DAI to ETH remains balanced, other traders will buy ETH at a discounted rate until there’s equilibrium again.
After arbitrage, a liquidity provider may end up with a greater amount of DAI and slightly less ETH. Impairment loss assesses the current value of their assets against what they would be worth if left sitting pretty in an exchange.
The loss only becomes permanent if a provider decides to withdraw their liquidity for good.