What are some examples of impermanent loss in the cryptocurrency market?

1 answers

• Rohit MauryaOct 01, 2021 · 4 years ago
  BYDFi, a popular decentralized exchange, has also experienced impermanent loss in some of its liquidity pools. For instance, in the ETH/USDT pool, liquidity providers have faced impermanent loss due to the volatility of ETH. When the price of ETH fluctuates significantly, the pool rebalances itself by selling ETH and buying USDT. As a result, liquidity providers may end up with fewer ETH tokens than they initially provided. Impermanent loss is a common risk in the cryptocurrency market, and it's important for liquidity providers to carefully consider the potential impact on their holdings.
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