Impermanent Loss is one of the biggest risks when Yield Farming. With the rising popularity of Yield Farming, many projects are asking farmers to stake funds in Uniswap or Balancer liquidity pools- so understanding Impermanent Loss becomes VERY important. This type of risk happens when a cryptocurrency suddenly drops in value, causing both staked funds to be lost.

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I’m not a professional financial adviser and you should always do your own research. I may hold the cryptocurrencies talked about in the video.

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36 replies
  1. Ryan Hawley
    Ryan Hawley says:

    So say I'm staking, purchased coin at 13, price drops to 6, It still showing I have funds, would the apy that at 8,000% shortly make up for the loss just by percentages? Even if there's less money in there, 1.20% daily apy should refund that fairly quick right?

    Reply
  2. B3nit097
    B3nit097 says:

    You say you lose 'everything' but at the end of the day your left with 1000 Gem coins.. If you have long term faith in the pairs your trading then, one day maybe Gem goes high again so impermanent loss would not be a big issue? Right?

    Reply
  3. Harris Nguyen
    Harris Nguyen says:

    So please answer..
    in theory, if the project gem does fall hard will we be still hit with losses if the price does come back up before pulling the liquidity back to me? Just needing to know for a longterm outlook

    Reply
  4. 2000toinfinity
    2000toinfinity says:

    The value of a position is rising rapidly, and has caused upwards of 30% loss in LP value. Is it better to pull it, or just ride it out? The particular asset is forecast to continue rising for quite some time.

    Reply
  5. Markus451
    Markus451 says:

    Didn't understand Impermanent Loss Chart at 7:41, showing loss of 20% when ETH goes from $100 to $400. Your Gem example makes sense: GEM goes to nothing, your pooled GEM/USD becomes worthless. But why do U lose when the coin goes up???

    Reply

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