Should buy liquidity mining tokens?

Recently, DeFi is attracting a lot of people by farming tokens. But, not everyone can FARM because the amount of money needed to farm to make a profit is also quite large.

Therefore, many brothers choose FOMO to buy these farmed tokens.

However, most of them lost money. Why?

TD; RD: DO NOT BUY LIQUIDITY MINING TOKEN TOO EARLY OR YOU WILL GET REKT.

The data below shows that the tokens of projects after launching liquidity mining will plummet 80-95% in the first 2 days.

Therefore, you should be very careful not to buy FOMO at that time.

Why did these liquidity mining tokens drop sharply in the first 2 days?

Simply, because supply is greater than demand.

Here, the main supply is the too high rate of token distribution to the market through the liquidity mining program.

Meanwhile, the demand to buy tokens (or the level of FOMO) has not caught up because most retail investors still do not know about the project.

Leading to a situation where there is only supply but no demand, so a sharp decrease in the price of the token is inevitable.

More specifically, you can see the table below showing the supply of tokens to the market of liquidity mining projects:

As you can see, projects with more than 10,000 tokens on the market every day have a very strong discount.

So, suppose in case you accidentally bought tokens on the first day, should you HOLD or not?

The following figures show the gain/loss of tokens 7 days after first traded. Your probability of returning to shore is 6/10 (~60%) after 7 days of holding.

Note: The above data is only a sample of 10 outstanding liquidity mining tokens, you can make your own spreadsheet based on this idea.

In conclusion, buying tokens with liquidity mining in the first 2 days carries a very high risk of losing money and the possibility of returning to shore is yes but not worth the risk.