Impermanent Loss: A STON.fi Guide

Stonfiers! More and more users are joining us, including experienced enthusiasts, professional traders, and newcomers to the world of DeFi. One of the most common questions from beginners is: why do they sometimes receive a smaller amount than expected when providing liquidity?

👉 The answer lies in impermanent loss, an unavoidable force governed by the laws of the market and DeFi. While it can't be solved completely, it's highly recommended to keep it in mind and have our special calculator handy.

ℹ️ Impermanent loss occurs when you provide funds into a liquidity pool and the price ratio of the tokens in that pool changes significantly. The approximate amount of impermanent loss can be calculated using this guide:

1.25x price change = 0.6% loss
1.5x price change = 2% loss
1.75x price change = 3.8% loss
2x price change = 5.7% loss
3x price change = 13.4% loss
4x price change = 20% loss
5x price change = 25.5% loss

We’ve prepared a guide for those who want to dive deeper into the topic:

🔗 Learn more about impermanent loss 🔗

We wish you fewer impermanent losses and more victories in the world of trading. Stay tuned.

#guide #DeFi

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