DeFi | What is impermanent loss?
Using the same constant product model, when the price ratio increases to 4x, impermanent loss is about 20%.
When prices change, arbitrageurs buy the tokens that have risen from the pool and leave behind the tokens that have fallen, so your share contains less of the token that rose.
The coin mentioned above: $UNI , current price 6.921 (24h -9.96%).
Understand the principles before getting started, and don’t make decisions on impulse.
#UNI
Using the same constant product model, when the price ratio increases to 4x, impermanent loss is about 20%.
When prices change, arbitrageurs buy the tokens that have risen from the pool and leave behind the tokens that have fallen, so your share contains less of the token that rose.
The coin mentioned above: $UNI , current price 6.921 (24h -9.96%).
Understand the principles before getting started, and don’t make decisions on impulse.
#UNI
