Update: This guide explains how Impermanent Loss (IL) works with examples using our V2 DEX. Our V3 ‘concentrated liquidity’ model is different, and IL is different on V3 as well. Here is a link to a guide that explains how IL works on V3.
One of the most frequently asked questions we hear at QuickSwap is “what are impermanent losses” and “how can I prevent them”? We understand that you want to protect (even increase) your hoard, and you may have heard that providing liquidity on a DEX is one way to do that. It’s true that many have had great success liquidity farming on AMMs. Yet others have suffered from massive impermanent losses that they’ve made permanent. So first, what does that term even mean?
Read the full article on our official blog here: https://blog.quickswap.exchange/posts/impermanent-losses-v2
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