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- Depositing digital assets, often into standard liquidity pools, can earn investors annual percentage yield (APY) far above what is currently offered by global banks. However, while high APY is offered as a potential upside, liquidity pools offer a sometimes unknown downside risk known as impermanent loss.
www.finder.com.au/cryptocurrency/defi/impermanent-lossWhat Is Impermanent Loss? Examples & How To Avoid It - Finder
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Jan 10, 2023 · What is APY in Crypto? APY, short for annual percentage yield, measures the rate of return when users deposit their funds into different lending and yield farming protocols. APY includes the effects of compound interest, which can transform low daily or hourly returns into massive amounts over time.
May 18, 2023 · Impermanent loss happens when the price of your tokens changes compared to when you deposited them in the pool. The larger the change is, the bigger the loss. Wait, so I can lose money by providing liquidity? And why is the loss impermanent?
Jun 26, 2024 · Crypto APY, or annual percentage yield, serves as a crucial metric for investors seeking to earn passive income rather than adopting aggressive strategies in a bearish market. This guide will unravel the intricacies of Crypto APY, shedding light on its significance, calculation methods, and how to harness its potential to optimize your returns.
Apr 30, 2024 · APY refers to the real rate of return earned on a digital asset investment over a year. Unlike simple interest rates, APY considers the effects of compounding, allowing investors to evaluate the potential growth of their investments accurately.
Nov 6, 2023 · What Is Impermanent Loss in DeFi? Impermanent loss happens when the money you make from providing liquidity to a pool is less than what you would have earned if you had just held the digital assets. This is caused by the price fluctuations of crypto assets within a DEX pool.
Sep 28, 2021 · Impermanent loss is a unique risk involved with providing liquidity to dual-asset pools in DeFi protocols. It is the difference in value between depositing 2 cryptocurrency assets within an Automated Market Maker-based liquidity pool or simply holding them in a cryptocurrency wallet.
Aug 27, 2023 · APY stands for Annual Percentage Yield. It measures the real rate of return on an investment over one year, taking into account the effect of compounding interest. In DeFi applications, users can lend their crypto assets to earn interest or provide liquidity to earn trading fees.
