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Author: Admin | 2025-04-28
And it becomes permanent only if the liquidity gets withdrawn.Therefore, the higher the volatility of one or both of the assets in the pool, the higher the impermanent loss. In the most common case, a pool comprises two cryptocurrencies in a 50:50 proportion, whereas to diminish the danger of impermanent loss, one of them is a less volatile asset or a stablecoin. However, other models have emerged where the exposure to the more unstable cryptocurrency is minimized to only 20%, 5%, or even 2%, in pools with proportions 80:20, 95:5, and 98:2, respectively. It has been proven that the impact of impermanent loss is limited in these cases but it is not erased completely and LPs’ yields may still be affected.Thus, the factors to consider when calculating the probability of impermanent loss at a certain point in time are the following: the average price change and the weight of each of the assets in the pool. The higher the weight of a more volatile asset results in high impermanent loss.Yield Farming on Mettalex DEXMost of the Mettalex markets are now yield farms providing a variable APY of ~20% — a rather generous yield rate compared with other programs. At the same time, it is worth mentioning that Mettalex’s protocol is designed to minimize risk for liquidity providers as much as possible. The DEX is generally not suitable for more volatile assets since it was developed to enable the trade of comparatively stable traditional commodities.So, by combining these two parameters, yield farming on the Mettalex DEX is turning out to be one of the most profitable and secure options out there. An APY of ~20% for a stablecoin yield farm is among the highest available in the DeFi space.However, yield farming is never totally risk-free. As more trades are executed on
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