How Not to Lose $$$ Being a Liquidity Provider (Uniswap, Cream, Curve)
The yields are enticing, however, being an LP comes with risks beyond that of operating in typical farming opportunities. In this video, I explain how these pools works and how to avoid impermanent loss.
The basic idea is that the automated market maker will price the assets in the pool based on something called the constant supply function. If there is less of an asset the price goes up and if there is more of an asset the price goes down.
What you need to know is that is the price of the assets in the pool move up or down relative to one another you will lose value by being a LP.
In my next video, I will show you how to become a LP on C.R.E.A.M.
How traditional order books work:
How UniSwap works:
How Uniswap returns work:
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