Impermanent Loss | How To Calculate And Mitigate DeFi's Biggest Risk
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Impermanent loss is a risk to assets deployed in Liquidity pools such as Uniswap, Sushsiwap, Pancakeswap, Pangolin etc. In this video we look at how liquidity pools work, how to calculate impermanent loss given a future price ratio between assets and how we can mitigate the risk by predicting volatility.
There's more information in the blog post at: https://jamesbachini.com/impermanent-...
00:00 Understanding Liquidity Pools
01:13 Liquidity Provider Risk
02:04 Calculating Impermanent Loss
05:07 Impermanent Loss Chart
05:54 Correlation Between Assets
06:46 Hedging Price Movements
08:30 Conclusion
For more content about crypto markets, blockchain development, passive income and online business visit my blog at https://jamesbachini.com/
Most of the code I write and talk about is open-sourced at: https://github.com/jamesbachini
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The content I create is to document my journey and for entertainment purposes. It is not under any circumstances investment advice. I am not an investment or trading professional and am learning myself while still making plenty of mistakes along the way. Any code published is experimental and not production ready to be used for financial transactions. DYOR and do not play with funds you do not want to lose.
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