How to Earn Passive Income with SPS, GLX and COLONY Tokens

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Hello Hive gamers! Splinterlands is one of the pioneer and number one game on Hive. Following the success of Splinterlands, co-founder @aggroed developed games under the Genesis League Sports and Arcade Colony ecosystems. Previously, I posted about how you can earn from staking the tokens in the game to earn rewards. You can even earn COLONY by staking SPS and GLX. Let's review the tokens.

The Game Tokens

SPS

SPS is the governance token in Splinterlands. Players earn it from playing the game. You can stake it to earn staking rewards, gain voting power for governance and increase the percentage earnings from battles. Staking SPS in the game earns 10.5% APR.

GLX

GLX is the governance token in the Genesis League Sports (GLS) eco-system. Staking GLX allows players to earn staking rewards, gain voting power for governance and earn more in-game rewards. Staking GLX earns GLGT tokens which is similar to Vouchers in Splinterlands.

COLONY

COLONY is the governance token in the Arcade Colony eco system. It has two live games, Moon Karts and Stakehouse Den and one game in development, Hyperrail Blaster. Players can stake COLONY tokens for voting power in governance and to earn additional rewards. There are no staking rewards for COLONY. However, players can earn COLONY tokens by staking both SPS and GLX. You can earn COLONY tokens by simply staking both SPS and GLX. This is on top of the rewards received from staking both tokens individually. This is already the second year of COLONY airdrops from staking SPS and GLX and the rewards have tripled to a total of 63m COLONY airdrop, 31.5m to staked SPS and 31.5m to staked GLX.

Players need to have BOTH SPS and GLX staked to qualify. At least 5,000 SPS staked on the Splinterlands platform and a minimum of 10,000 GLX staked on Genesis League Sports or Genesis League Goals. 50% of the airdrop will be distributed to users who have staked SPS, while the remaining 50% will go to those who have staked GLX.

An Alternative Method to Earn Passive Income

What if you're not playing the game but still want to get involved in the tokens? An alternative method of earning which offers higher APRs is through liquidity pools. Some in the Hive community are happy with the 15% APR offered by staking HBD. However, there are liquidity pools offer even so much more. Let's check them out.

SPS:COLONY

The SPS:COLONY pool offers an APR of 21% paid in COLONY tokens. This means that if you add $100 worth of SPS ($50) and COLONY ($50), you will receive COLONY tokens worth $21 daily ($21/365).

GLX:COLONY

The GLX:COLONY pool offers a higher APR of 24%. The rewards are also paid in COLONY tokens dropped daily.

SWAP.HIVE:COLONY

The SWAP.HIVE:COLONY pool has the highest APR at 32%. Similarly, the rewards are in the form of COLONY tokens added to the users wallet daily.

SWAP.HIVE:GLGT

Players earn GLGT by staking GLX in the game. There is also a liquidity pool for SWAP.HIVE:GLGT that pays 31% APR paid in GLX tokens.

Beware of Impermanent Loss!

While the liquidity pools provide high APRs, it's not without risks. You have to do your own research and manage the risks before putting your funds in liquidity pools. The main risk for liquidity providers (LPs) is impermanent loss. It occurs when the price ratio between the pooled assets changes.

For example, if SWAP.HIVE in the pair rises in value much faster than COLONY, the liquidity provider would have been better off simply holding both tokens instead of putting it liquidity pools. When supplying liquidity with two assets, if the price of one increases, the pool automatically rebalances so that the total value of each asset remains equal to its initial proportion.

As prices change, the pool ends up holding more of the less valuable asset, since traders are effectively selling it to the liquidity provider. This means that when you withdraw your liquidity at that time, you’ll receive fewer of the high value tokens than you initially deposited, which could result in a loss compared to just holding the assets in your wallet.

Caveat

This post is not an invitation to buy SPS, GLX or COLONY. Crypto is highly volatile and you may lose funds if you're invest blindly. I myself have lost funds many times more than I care to admit. Please do your own research and manage your risks before investing in any token.

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Nice reminder for me. I have these tokens and I check SPS often but not the others so I probably have rewards to collect.

The SPS:COLONY pool offers an APR of 21% paid in COLONY tokens. This means that if you add $100 worth of SPS ($50) and COLONY ($50), you will receive COLONY tokens worth $21 daily ($21/365).

Should be $0.0576 daily rather than 21? That's what I get doing the 21 / 365 math. :)

Impermanent Loss! People don't think about that enough. And really, what cah you do? You can't predict it. If you could predict with certainty which token would go up the most, you would just go and buy that token, Unless it goes up less than what you're going to make from LP Rewards, but you can't predict that either! :)

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Yes, 21/365 daily 😀

Only way to mitigate risk of impermanent loss is to keep records of how much you put in and monitor their prices daily. Good thing about LP's is their liquidity. You can withdraw funds at once.

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