Impermanent Loss - Revision history

Anantasesa: Grammar

2022-10-23T17:54:52Z

Grammar

Anantasesa: Grammar

2022-10-23T17:53:40Z

Grammar

Ferhat: updated link

2022-09-04T14:18:56Z

updated link

Misterpiggie49: Added an example of impermanent loss

2022-01-28T18:16:02Z

Added an example of impermanent loss

Robin Torque at 16:48, 17 April 2021

2021-04-17T16:48:43Z

Robin Torque at 14:37, 17 April 2021

2021-04-17T14:37:53Z

Nico89 at 21:45, 14 April 2021

2021-04-14T21:45:30Z

Rainer at 09:19, 17 December 2020

2020-12-17T09:19:56Z

Rainer: /* Impermanent Loss */

2020-12-17T09:06:27Z

Impermanent Loss

Rainer: Created page with "== Impermanent Loss == Assets of a Liquidity pool can have strong price fluctuations. Usually, this is solved by arbitrators, which lead to a balanced pool. But, removing you..."

2020-12-17T09:05:44Z

Created page with "== Impermanent Loss == Assets of a Liquidity pool can have strong price fluctuations. Usually, this is solved by arbitrators, which lead to a balanced pool. But, removing you..."

New page

== Impermanent Loss ==

Assets of a Liquidity pool can have strong price fluctuations. Usually, this is solved by arbitrators, which lead to a balanced pool. But, removing your assets from the pool at a time when the pool is not balanced can lead to permanent losses. In contrast, when the pool is unbalanced but you do not remove your assets it's just an impermanent loss.

''Rule of thumb: The longer you wait, the lesser is the risk of a loss.''

'''A detailed explanation of impermanent loss can be found here:

'''https://julianhosp.com/impermanent-loss-other-liquidity-mining-risks-explained/

'''A calculator to calculate the impermanent loss is here:'''

https://chitty27.pythonanywhere.com/

Example: You have a BTC-DFI Liquidity pool (Asset 1: BTC; Asset 2: DFI). The price of DFI doubles, while BTC is not changing of all. You should key in into the calculator:

Asset 1: 0

Asset 2: 100%

After hitting Calculate it will compute an impermanent loss of 5.72%.

@@ Line 23: / Line 23: @@
 https://www.krypto-magazin.de/impermanent-loss-rechner/ (in German)
-Example: You use the BTC-DFI liquidity pool (Asset 1: BTC; Asset 2: DFI). The price of DFI doubles, while BTC has not changed at all, or DFI has increased against BTC by 2x. You should key in into the calculator:
+Example: You use the BTC-DFI liquidity pool (Asset 1: BTC; Asset 2: DFI). The price of DFI doubles, while BTC has not changed at all, or DFI has increased against BTC by 2x. You should key this into the calculator:
 ''Asset 1: 0%''

@@ Line 23: / Line 23: @@
 https://www.krypto-magazin.de/impermanent-loss-rechner/ (in German)
-Example: You use the BTC-DFI liquidity pool (Asset 1: BTC; Asset 2: DFI). The price of DFI doubles, while BTC is not changing of all, or DFI has increased against BTC by 2x. You should key in into the calculator:
+Example: You use the BTC-DFI liquidity pool (Asset 1: BTC; Asset 2: DFI). The price of DFI doubles, while BTC has not changed at all, or DFI has increased against BTC by 2x. You should key in into the calculator:
 ''Asset 1: 0%''

@@ Line 17: / Line 17: @@
 '''A calculator to calculate the impermanent loss is here:'''
-https://decentyields.com/impermanent-loss-calculator
+https://defichain-einstein.com/
 and:

@@ Line 1: / Line 1: @@
-Assets of a Liquidity pool can have strong price fluctuations. Usually, this is solved by arbitrators, which lead to a balanced pool. But as a Liquidity provider, pulling out assets from the pool at a time when the pool is not balanced can lead to permanent losses. In contrast, when the pool is unbalanced but you do not pull out your assets it's just an impermanent loss.
+Assets of a liquidity pool can have strong price fluctuations (in relation to each other). Arbitrageurs can arbitrage differences between exchanges, which is why liquidity pools stay balanced, but it comes at a cost to liquidity miners.
 ''Rule of thumb: The longer you wait, the lesser is the risk of a loss.''
@@ Line 7: / Line 11: @@
 '''A detailed explanation of impermanent loss can be found here:
-'''https://julianhosp.com/impermanent-loss-other-liquidity-mining-risks-explained/
+https://julianhosp.com/impermanent-loss-other-liquidity-mining-risks-explained/
@@ Line 15: / Line 19: @@
 https://decentyields.com/impermanent-loss-calculator
-or:
+and:
-Asset 1: 0
+https://www.krypto-magazin.de/impermanent-loss-rechner/ (in German)
-Asset 2: 100%
+Example: You use the BTC-DFI liquidity pool (Asset 1: BTC; Asset 2: DFI). The price of DFI doubles, while BTC is not changing of all, or DFI has increased against BTC by 2x. You should key in into the calculator:
-After hitting Calculate it will compute an impermanent loss of 5.72%.
+After hitting "Calculate" it will compute an impermanent loss of 5.72%.

← Older revision		Revision as of 16:48, 17 April 2021
Line 14:		Line 14:

	https://decentyields.com/impermanent-loss-calculator		https://decentyields.com/impermanent-loss-calculator
		+
		+	or:
		+
		+	https://www.krypto-magazin.de/impermanent-loss-rechner/

	Example: You have a BTC-DFI Liquidity pool (Asset 1: BTC; Asset 2: DFI). The price of DFI doubles, while BTC is not changing of all. You should key in into the calculator:		Example: You have a BTC-DFI Liquidity pool (Asset 1: BTC; Asset 2: DFI). The price of DFI doubles, while BTC is not changing of all. You should key in into the calculator:

@@ Line 13: / Line 13: @@
 '''A calculator to calculate the impermanent loss is here:'''
-https://chitty27.pythonanywhere.com/
+https://decentyields.com/impermanent-loss-calculator
 Example: You have a BTC-DFI Liquidity pool (Asset 1: BTC; Asset 2: DFI). The price of DFI doubles, while BTC is not changing of all. You should key in into the calculator:

← Older revision		Revision as of 09:19, 17 December 2020
Line 1:		Line 1:
−	Assets of a Liquidity pool can have strong price fluctuations. Usually, this is solved by arbitrators, which lead to a balanced pool. But, ~~removing~~ your assets from the pool at a time when the pool is not balanced can lead to permanent losses. In contrast, when the pool is unbalanced but you do not ~~remove~~ your assets it's just an impermanent loss.	+	Assets of a Liquidity pool can have strong price fluctuations. Usually, this is solved by arbitrators, which lead to a balanced pool. But, pulling out your assets from the pool at a time when the pool is not balanced can lead to permanent losses. In contrast, when the pool is unbalanced but you do not pull out your assets it's just an impermanent loss.

	''Rule of thumb: The longer you wait, the lesser is the risk of a loss.''		''Rule of thumb: The longer you wait, the lesser is the risk of a loss.''

← Older revision		Revision as of 09:06, 17 December 2020
Line 1:		Line 1:
−	~~== Impermanent Loss ==~~
−
	Assets of a Liquidity pool can have strong price fluctuations. Usually, this is solved by arbitrators, which lead to a balanced pool. But, removing your assets from the pool at a time when the pool is not balanced can lead to permanent losses. In contrast, when the pool is unbalanced but you do not remove your assets it's just an impermanent loss.		Assets of a Liquidity pool can have strong price fluctuations. Usually, this is solved by arbitrators, which lead to a balanced pool. But, removing your assets from the pool at a time when the pool is not balanced can lead to permanent losses. In contrast, when the pool is unbalanced but you do not remove your assets it's just an impermanent loss.