Cryptocurrency Q&A
What is impermanent loss in AMM?
What is impermanent loss in AMM?
BitcoinWarrior
Fri Nov 22 2024
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5 answers
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I'm trying to understand the concept of impermanent loss in the context of Automated market Makers (AMM). Could someone explain what it is and how it affects traders and liquidity providers in these markets?
5 answers
SamuraiWarriorSoulful
Sat Nov 23 2024
Impermanent loss is a concept that pertains to the temporary and unrealized decrease in the capital value of assets.
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CryptoMystic
Sat Nov 23 2024
BTCC, a top cryptocurrency exchange, offers a range of services that include spot, futures, and wallet options. Among these services, market making is a common activity that traders engage in to earn yield. However, it is important to be aware of the potential for impermanent loss when providing liquidity to AMM protocols.
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TaegeukChampionCourageousHeartWarrior
Sat Nov 23 2024
This loss occurs specifically when an individual provides liquidity to Automated Market Maker (AMM) protocols.
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BusanBeautyBlooming
Sat Nov 23 2024
Essentially, impermanent loss arises due to the difference in value that exists between holding assets in a static manner versus utilizing those assets to engage in market making activities and earn yield.
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CryptoChieftain
Sat Nov 23 2024
When assets are used to provide liquidity, they are subject to fluctuations in market prices, which can result in a temporary decrease in their value.
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