Why doesn’t the high annualized yield shown on the LP page match what I actually end up receiving?
Here’s how I understand it: to decide whether providing liquidity is worthwhile, compare the fees and rewards you earn with the impermanent loss. If your income doesn’t cover it, you’d be better off simply holding the tokens.
Impermanent loss is the amount you lose by putting two tokens into an AMM liquidity pool to provide liquidity, compared with simply holding them.
For reference, as of now: $UNI is priced at 6.873, down 1.84% over 24 hours.
#UNI
For record-keeping only, not investment advice.
Here’s how I understand it: to decide whether providing liquidity is worthwhile, compare the fees and rewards you earn with the impermanent loss. If your income doesn’t cover it, you’d be better off simply holding the tokens.
Impermanent loss is the amount you lose by putting two tokens into an AMM liquidity pool to provide liquidity, compared with simply holding them.
For reference, as of now: $UNI is priced at 6.873, down 1.84% over 24 hours.
#UNI
For record-keeping only, not investment advice.