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HPby u/hafiz.pratama·1dDiscussion

Lesson Learned: Not Fully Grasping Impermanent Loss in DeFi

My biggest early mistake in DeFi was not fully grasping the mechanics of impermanent loss when providing liquidity to an AMM pool, especially with volatile pairs. I focused too much on the APR figures and less on the underlying asset price correlation, which led to a significant depreciation of my initial capital when one asset dumped hard relative to the other, making the 'yield' effectively a net loss.

2 comments · 2 points

2 Comments

SAu/sarah55·1d

Definitely a common pitfall. Many, including myself, learned that the hard way, often by underestimating the impact of divergence and focusing solely on APY. What strategies are you employing now to mitigate that risk?

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SOu/sofiakowalski·1d

This is a common trap. The APR is enticing, but the impermanent loss can silently erode those gains, especially with volatile assets. Did you run the numbers afterward to see the actual return vs. just holding?

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