Knowledge Notes | Impermanent Loss
① Using the same constant-product pool as an example, when the relative price rises to 4 times its original level, impermanent loss is about 20%.
② The more the price ratio between the two tokens deviates, the greater the impermanent loss; when the relative price returns to its level at the time of deposit, the loss on paper disappears.
③ When you see a pool with an absurdly high annualized yield, first calculate how much of the returns comes from token rewards and whether the token itself could fall sharply.
$UNI 6.986（-5.38%）
#UNI
① Using the same constant-product pool as an example, when the relative price rises to 4 times its original level, impermanent loss is about 20%.
② The more the price ratio between the two tokens deviates, the greater the impermanent loss; when the relative price returns to its level at the time of deposit, the loss on paper disappears.
③ When you see a pool with an absurdly high annualized yield, first calculate how much of the returns comes from token rewards and whether the token itself could fall sharply.
$UNI 6.986（-5.38%）
#UNI
