Can explain to me concept of Impermanent Loss while

Question

Can explain to me concept of Impermanent Loss while

staking EGLD-MEX in the LP? Example I staked 5 EGLD and swapped 50% for MEX and staked in LP. So now if I wanted to withdrawl it what happens since EGLD and MEX dropped since i bought it

#blockchain #cryptocurrency #elrond #english

0

24.11.2021

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X-89

Impermanent loss occurs when the price of the tokens change - it adjusts your allocation accordingly

0

24.11.2021

A

I guess it’s the same.. you buy btc today at 56k… you stake it… and in 30 days btc is 40k? 🙂 and you decide to sell it at a loss. And 2 months later is 70k. the joys of crypto? lol

0

24.11.2021

Michael Stephen | MultiversX - Istari Vision

If you want to fully understand the concept of Impermanent loss, we at Istari made a comprehensive article about it: https://istarivision.medium.com/understanding-liquidity-and-liquidity-pools-4d4d3efa17a9

0

24.11.2021

Michael Stephen | MultiversX - Istari Vision · Accepted Answer

Depends on how much EGLD dropped and how much MEX dropped. If they both dropped the same % then you don't have impermanent loss, but if one dropped more than other then you will have some % impermanent loss. Here you have to understand that impermanent loss is not actually a loss per se, you are not losing tokens, you just lose the opportunity of gaining more value in $ when you LP vs when you just hold the tokens. But the MEX farm rewards will cover impermanent loss many times fold.

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Can explain to me concept of Impermanent Loss while

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