The Investors Guide to Navigating Impermanent Loss
Typical AMM’s allocate a .3% trading fee to liquidity providers, which allows LP’s to profit based on the transaction volume. The user’s share is now 1.5 BNB and 40 CAKE, which equates to $100, but if this user held each asset individually, they would instead have $120. This is the impermanent loss in action, as …
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