Knowledge Notes | Impermanent Loss
① It’s called a “temporary” loss because if prices return to their original levels, the loss disappears; it only becomes a realized loss when liquidity is withdrawn.
② Using the x × y = k model as an example, when one token doubles in price relative to another, the impermanent loss is about 5.7%.
③ Pools where the prices of both assets are very similar, such as swaps between stablecoins, usually have much lower impermanent loss.
$UNI 6.46（-9.36%）
① It’s called a “temporary” loss because if prices return to their original levels, the loss disappears; it only becomes a realized loss when liquidity is withdrawn.
② Using the x × y = k model as an example, when one token doubles in price relative to another, the impermanent loss is about 5.7%.
③ Pools where the prices of both assets are very similar, such as swaps between stablecoins, usually have much lower impermanent loss.
$UNI 6.46（-9.36%）