Beginner’s Guide to (Getting Rekt by) Impermanent Loss

Have more questions? Submit a request

IL.WTF allows users to see how much impermanent loss they’ve suffered on their liquidity pools, and which pools may have burned them the most. IL.WTF calculates impermanent loss by measuring the value of your tokens in a liquidity pool (including fees collected) versus the value of simply holding the tokens in your wallet.

Automated market maker (AMM) technology has taken off in spite of one of DeFi’s dirty secrets:Users who provide liquidity in AMM protocols can see their staked tokens lose value compared to simply holding tokens on their own wallets.

This risk, known as “impermanent loss”, has prevented many mainstream and institutional users from providing liquidity, since unlike most staking products, AMMs run the risk of under-performing a basic buy-and-hold strategy. Some users are completely unaware of the risk, others are vaguely familiar with the concept. But most people don’t really understand how and why impermanent loss occurs.

Bancor fully protects users from impermanent loss, so you can earn more reliable yield without living in fear of your deposit getting rekt. Safely Deposit on Bancor, Or track your IL on APY Vision to monitor your deposits and adjust your exposure accordingly.

Articles in this section

Was this article helpful?
0 out of 0 found this helpful