I guess so, but keeping funds at low liquidity pools can also lead to that - as far as I understand.
I'm not sure how? I could be missing something, and just did a quick search and came up with nothing. Low liquidity is technically good for a pooler, but bad for a swapper. Which is where we are, trading in wHive is too illiquid for anyone to use it right now.
I thought that with low liquidity a swap trade may use out all of the tokens provided in the pool, so you can end up with only one token.
But the more I think about it, I'm not so sure. It's because uniswap brings up the swap rate so that you may end up with tokens bought at lower rate than initial one.
Well, first off uniswap won't let you do it in one go. Here's what happens when I try to buy $680 of wHive (ignore the fact I had to use my LINK, the route shows you it would be in ETH):
So it won't let me buy $680 because it would throw the pool off too much. But realistically its doing that for my benefit, not the LPs. Look at that price impact. Yes, the pool would have too much ETH and not enough Hive, but I'd be putting in waayy more ETH value than Hive value I'd be able to take out. This would cause the "value" of Hive to gap upwards, creating an arbitrage opportunity where anyone can buy Hive elsewhere and sell at a pretty free 20% profit.
Of course low liquidity and high gas fees means noone can do this if the pool ends up, say 3% or something else small off, so that is a "risk". But if the pool had basically only one token.... let me know the pool so I can sell in the other for easy coins.