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HomecryptocurrencyImpermanent Loss: How to Navigate the Rollercoaster of Liquidity Pools

Impermanent Loss: How to Navigate the Rollercoaster of Liquidity Pools

Impermanent loss is a term used in decentralized finance (DeFi) that refers to the potential loss of value experienced by liquidity providers in automated market maker (AMM) protocols like decentralized exchanges (DEXs).

When liquidity providers deposit their assets into a pool, they contribute an equal value of two tokens. However, if the prices of these tokens change, the pool becomes imbalanced, resulting in losses for liquidity providers. Read More

Ruchi Tomar
Ruchi Tomarhttps://financiallanes.com
A full time blogger from last 1 year. experienced in content writing.
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