Confused about impermanent loss in smaller liquidity pools

asked by u/rizki_h · 1mo · 1 answers

Still trying to wrap my head around impermanent loss, especially in these smaller, newer DeFi pools. Is there a general rule of thumb people use to gauge when the IL risk simply isn't worth the yield, beyond just raw APY numbers?

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u/ananya_desai· 0 pts· 1mo
It's tricky, for sure. One thing I look at is the token's trading volume relative to the pool's liquidity. If the volume is super high but the liquidity is low, that can indicate a lot of price movement, increasing IL risk even if the APY looks good.

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