NewsMV
In focus: the cost embedded in every liquidity position on decentralized exchanges like Uniswap and Balancer.
Impermanent loss measures the gap between holding a token pair in a wallet versus depositing those tokens into an automated market maker pool.
Swap fees, which run from 0.01% to 1.00% per trade on Uniswap, are the primary offset, and whether the math works depends on volume.
The rebalancing mechanics The constant product formula (x y = k) governs how pool ratios shift as token prices diverge.
Keep reading