))
What Is Impermanent Loss - DeFi Made Simple 🤓
Manage episode 337466170 series 3381606
Content provided by Part Time Economist. All podcast content including episodes, graphics, and podcast descriptions are uploaded and provided directly by Part Time Economist or their podcast platform partner. If you believe someone is using your copyrighted work without your permission, you can follow the process outlined here https://player.fm/legal.
https://www.youtube.com/watch?v=nKjti1x_seM
Impermanent loss refers to a situation in which a person can "lose" money lending cryptocurrency on DeFi protocols while simultaneously increasing the value of their holdings. In my opinion, impermanent loss is one of the most difficult crypto concepts to understand which is why I made this beginner-level video that explains what impermanent loss is, how impermanent loss works, and mitigating factors to consider when it comes to impermanent loss. #defi #crypto #uniswap
For those of you who don't have time to watch the whole video, the key points are that 1) Impermanent loss isn't always a loss per se, but rather the lost value compared to simply hodling the assets. 2) Impermanent loss is a function of the way that DeFi protocols automatically rebalance the ratio of their assets via the AMM algorithm.
Timestamps
00:00 Introduction
02:45 What is Imperrmanent Loss?
04:40 Liquidity Pool Deposits
07:40 Withdrawing From Liquidity Pool
09:05 Impermanent "Loss" Really Isn't
11:10 Avoiding Impermanent Loss
13:21 Conclusion
54 episodes
Share
