I am looking into providing liquidity to ETH/WBTC on UniSwap because I like those tokens. I want to understand why people are making this swap though. Swapping on UniSwap requires gas and still requires paying taxes. If people want to change their ratio of ETH:BTC, why don’t they just transfer to an exchange and sell one asset and buy the other. This seems like it would probably cost less in gas. My concern is that the exchange volume of ETH/WBTC is primarily people making this swap with the intention of providing liquidity themselves. That’s the reason I would be swapping ETH/WBTC. If that’s the case, the returns would likely plummet over time.
Thoughts?
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