Cryptocurrency Q&A
What is an example of impermanent loss?
What is an example of impermanent loss?
Eleonora
Thu Nov 21 2024
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7 answers
2025
I'm looking for an example that illustrates the concept of impermanent loss. I want to understand this concept better through a specific scenario or case.
7 answers
CrystalPulse
Sat Nov 23 2024
When traders utilize a DEX, they often engage in swapping one asset for another.
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HanRiverVisionary
Sat Nov 23 2024
For instance, a trader might decide to purchase Ethereum (ETH) using USDC, a stablecoin pegged to the US dollar.
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Carolina
Sat Nov 23 2024
In such a transaction, the trader's position becomes sensitive to the price fluctuations of both Ethereum and USDC.
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Sebastiano
Sat Nov 23 2024
If the market conditions change unfavorably, particularly if the price of ETH declines compared to USDC, the trader's anticipated profit can diminish.
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NebulaNavigator
Sat Nov 23 2024
Impermanent loss arises in a specific scenario involving decentralized exchanges (DEXs).
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