Be very careful going in on a liquidity pool where one or both tokens are likely to go down in price.
Impermanent loss hurts on the way up, but it hurts just as much on the way down.
This came to mind because of the @danielesesta / $TIME wonderland fiasco from this week.
Impermanent loss hurts on the way up, but it hurts just as much on the way down.
This came to mind because of the @danielesesta / $TIME wonderland fiasco from this week.
I had some exposure to a $wMEMO - $MIM LP, which I cut a few days ago.
If one coin goes to $0, the entire LP will go to ~$0 too (because the pool is constantly rebalancing).
Given the recent updates we've been seeing about $TIME / $wMEMO, I felt that LP-ing was too risky.
If one coin goes to $0, the entire LP will go to ~$0 too (because the pool is constantly rebalancing).
Given the recent updates we've been seeing about $TIME / $wMEMO, I felt that LP-ing was too risky.
I am getting rekt in @beethoven_x multi-token LP called "The Magic Touch by Daniele", as all tokens from that pool - $ICE, $SPELL, $wMEMO, $FTM, $MIM - were down a lot today.
IL is actually not too bad since all tokens are down, but net losses on the LP obviously suck.
IL is actually not too bad since all tokens are down, but net losses on the LP obviously suck.
If you want to understand how DEXes, AMMs and LPs work, then check out this thread:
https://twitter.com/shivsakhuja/status/1473794498081689601?s=21
If you want to understand Impermanent Loss in more depth, then see this:
https://twitter.com/shivsakhuja/status/1482188295488430086?s=20
For context, @0xSifu previously founded a company that disappeared with $169M.
Before this, @0xSifu ran an identity theft ring and was arrested.
@danielesesta knowingly decided not to disclose this info while allowing @0xSifu to handle @Wonderland_fi's $700M treasury
Before this, @0xSifu ran an identity theft ring and was arrested.
@danielesesta knowingly decided not to disclose this info while allowing @0xSifu to handle @Wonderland_fi's $700M treasury
If you're wondering what happened exactly, check out this thread by @zachxbt
https://twitter.com/zachxbt/status/1486591682728673282
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