Read on Twitter
I see too many people talking about 'staking' coins. Actually, they mean 'providing liquidity' at an AMM DEX which comes with risks: impermanent loss. This is not all about wins.What are AMM DEXs?
See AMM DEX thread (1-16)
What is impermanent loss?
See thread (1-4)
1/4 https://twitter.com/Martijncvv/status/1319674429690052609
2/4
* Took this info from Binance Academy
Impermanent loss happens when you provide liquidity to a liquidity pool, and the price of your deposited assets changes compared to when you deposited them. The bigger this change is, the more you are exposed to impermanent loss.
* Took this info from Binance Academy
Impermanent loss happens when you provide liquidity to a liquidity pool, and the price of your deposited assets changes compared to when you deposited them. The bigger this change is, the more you are exposed to impermanent loss.
3/4
It’s called impermanent loss because the losses only become realized once you withdraw your coins from the liquidity pool.
A simple rule, the more volatile the assets are in the pool, the more likely it is that you can be exposed to impermanent loss.
It’s called impermanent loss because the losses only become realized once you withdraw your coins from the liquidity pool.
A simple rule, the more volatile the assets are in the pool, the more likely it is that you can be exposed to impermanent loss.
4/4
If you buy a token because you think it will appreciate value very fast. It's not the smartest move to start providing liquidity since you will risk losing value.
For more info, check out the article.
https://academy.binance.com/en/articles/impermanent-loss-explained
Feel free to RT the first tweet to warn others
If you buy a token because you think it will appreciate value very fast. It's not the smartest move to start providing liquidity since you will risk losing value.
For more info, check out the article.
https://academy.binance.com/en/articles/impermanent-loss-explained
Feel free to RT the first tweet to warn others
