What is Impermanent Loss and when you shouldn't care about it

In this video, I talk about impermanent loss and why I don't think liquidity providers should worry about it.

#ethereum #defi #uniswap

Community Fund: 0xC4610C560eFEc4A37ba9DFe1268Da37112cBbfe2
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Referenced Links:

[KaiSosceles]

Too many people are talking and worried about impermanent loss and we should be talking about exposure risk associated with shitcoin LPs. Glad thats the first thing you mentioned.

[lukarinho]

Hey Justin. Thanks for the clear and concise explanation + all those additional links. Really enjoy watching your vids for some weeks now and what a bummer I did not found your channel earlier. Keep it up for us. Much appreciated!

[yjluo]

I think of LP as a strategy similar to grid trading: buy low and sell high done through auto balancing. Even better, LP earns transaction fee and sometimes liquidity mining reward on top.

[enble]

@Justin Bram, I don't even know how many videos I've seen and was still confused on the concept. You made it super clear. Thank You very much, you are awesome!

[z]

Some rules of thumb that helped me when it comes to IL:
-symmetrically enter if you are bullish on both assets long-term, choose a deep pool to reduce slippage fee
-do not assymetrically enter with the asset that you believe will outperform
-assymetrically enter with the asset that you believe is going to underperform
-do not enter pools with speculative / volatile altcoins

[pontuslagerberg]

Love this, especially how you backed your argument in traditional financial models. Thanks for the video!

[RaHBoW]

Thank you for the fantastic video. This made me think of the impermanent loss from another angle. Most articles make it look like something one should be afraid of, but in a way, it's a good thing. Now I think of it more as a hedge.

[aaronsmith]

So basically invest in LP pairs you believe in and stay in it for the long term since most of the rates are calculated in APY

[Gonga_P]

The best video on impermanent loss out there that I have seen.

Thank you for providing me with information. i appeciate that youre not just trying to manipulate me into joining some pool.

[nidalalghad]

Thank you so much. That is exactly what I was looking for. I liked and subscribed :)

[bryantnowlin]

This was great info, thank you so much! I liked and subscribed.

[SergeyLisov]

Great video! It helped me a lot to understand the issue, and also confirmed my thoughts and guesses.

[jaykaayable]

Great video, provides more clarify on IL. Thanks Justin!

[Ginger_McElfresh_Art]

Great video (and cohost)! Thank you for doing this topic. The only time I really consider pl is when I am wanting to accumulate a particular coin, like in a down market, I wouldn't want to pair it with something that would go down further, or I would lose some of those coins when splitting the lp.

[shaunenslin]

This was very good. Great simple explanation

[Xeonise]

The thing is that while HODLing both 50/50 gives you diversification, impermanent loss goes up as one of the assets underperform. You are guaranteed to be on the losing side of any sustained move in either direction as the position is rebalanced.

[thejamesinator]

Great breakdown, mate. Quality content 👍

[Theo-mztl]

Great Channel my Guy! It's somewhat sad that you only have 5, 000 subs, you deserve much more

[hdclip]

wow i love this I will never be worried again about imp loss. thanks you earned subbed and liked

[mtempz]

Thank you so much bro!!!! I’ve made so much more locking in my returns with fees than buying, holding and losing out because I keep waiting for more and end up losing because massive sell offs in the past