I’m sorry, but I can’t assist with that because you didn’t provide the YouTube script. Could you please provide it?
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So what are the pros and cons?Because by your example you lose money when the price goes up and you lose money when the price goes down
You're doing a fantastic job! I need some advice: I have a SafePal wallet with USDT, and I have the seed phrase. (behave today finger ski upon boy assault summer exhaust beauty stereo over). What's the best way to send them to Binance?
Guys dont let impermenant loss scare you! If eth increase by 15X then you will have tons of reward tokens & interest from fees that will increase in value over time as well. If Eth decrease in value you wont be in drawdown; instead, you will still gain reward tokens plus intetest from fees. Also, the only time you should cashout into USD is if the dollar index is strong, a million dollars on a weak dollar index is not the same in value. so if blue chip crypto currencies are at an all time high then the dollar index is typically weaker in value.
Sounds like a lose-lose situation for the liquidity provider. Some examples as to why it's beneficial to be a liquidity provider would be nice.
not gonna lie the explaination is good and shit at the same time speak slower and explain the calculation alot of skipping of steps or illustrations
I just started playing with liquidity pools on enosys flr network. Didn't know any of this before. Only have a few k invested hope it goes ok
It should be $15492, not $15292 @ 6:33. Therefore, as expected profit to the arbitrageurs ($508.06) is equal to the impermanent loss of the liquidity provider ($508.06).
It should also be 29.10 ETH added, not 30 ETH @ 5:12, where the corrected amount of ETH in the Liquidity Pool should be sqrt(constant product / ETH price) = 129.10 ETH.
The division is incorrect @ 5:37, where the correct value is 1M / 130 = $7692.31, which you mention a few seconds later. In reality the actual value is 1M / 129.10 = $7,746.
Making these corrections, the total liquidity @ 6:07 is $60 * 129.10 = $7,746 (in ETH), and so is the cash at $7,746, totalling $15492. The LP should always have an equal value of both coins at equilibrium.
So it's opportunity cost in one side when the asset price rises. And "unrealized loss" on the other when the asset price drops. Ideally you want the price to remain stable so that your initial invested capital doesn't change and you only collect the fees.
so im safe in impanent loss if my position is two different stablecoins?
Your videos are awesome, thank you
Great channel and content!
You sound like the lore explorer
Imperminal loss is a terrible term xD
When i have 100$ I want to invest in crypto I always buy 50$ stablecoin anyways because I think crypto is too volatile
So therefore the choise is very easy for me when i have 50usdc & 50$Sol – Put them to work yes or no 😉
Hello, brother, I have a little bit of confusion while calculation guide me through this. From where did you get 1million to divide to 130 eths because if we multiply 10,000 to 10,000 it gave us 100,000,000 and second thing is if we divide 1million to 130 it gave us 7,692 then where did 14,285 dollars come from ?
In a scenario where I put in two correlated tokens, say 10 wETH and 10 stETH, I will receive an LP token representing my stake in the pool. The price of ETH in dollar terms goes down 20%, what will I receive when i burn the LP token to exit the pool? Will I get 10 wETH and 10 stETH i put in? Or will i receive 8 wETH and 8 stETH because the price went down? Is there any risk if the volume of the liquidity pool is low and spread is high and why? According to your video there should not be any impermanent loss as the assets are correlated.
Thanks for explaining!
Why would I want to add any liquidity if all I see is losses..?
Best explanation on YT, thank you.
Good amount effort has gone into making such an informative video though the last minute is not that clear where you showed the status of Imperm. Loss VS price movements of assets + that chart/graph still looks scary 🙂
Could have explained that in a separate video though.
However, overall a gem of a video.
Thank you.
Still didnt get this
I mean by the time you pay the exchange fees, slow ass Arbitrum fees and so on, is there even any 'arbitrage' opportunity left?
The video is talking and moving too fast to understand. I would have to watch about 20 times pause and play .
So how often do you adjust your liquidity and when? What's the best way to do that?
Is there a video that explains the math used in this video?
Then, in summary, is not profitable to provide liquidity(in case of variable asset & stable coin) unless the rewards you get could cover the impermanent loss.(which sounds not feasible)
I though the impermanent loss when Ethereum goes down, was positive, but either way are negative, so just better to hold ? (Unless you provide liquidity of 2 variable assets and their price go up)
Great video, thank you! Could you tell me, what software do you use for animation?
Thos are some rookie numbers!
Awesome video like all Whiteboard Crypto videos. I did not get the part where $7800 + $7692 equal $15295.
How dare you explaining impermanent loss to my grandmother?
so long story short either if price go up or down you are pre much in loss providing liquidity pool assets lmao ?=
This is a amazing Video. However I think we should also include possible earning if we stake the LP & how we reconcile the stake earring + LP fee again the IL. I do want to see more on how the LP fees get added to your LP or paid to you for creating the LP. It wasn’t as clear as your many other videos