Impermanent Loss (IL) has always been the biggest concern for all liquidity providers (LP) when providing liquidity. Nobody enjoys seeing their pooled token balance dwindled while the price moons. Unfortunately, if the pool uses the “X * Y = K” equation, it is unavoidable.
So, in this post I discuss about what I think are some AMMs to consider LP-ing and how they deal with IL.
I will be using “ape level”, a scale of 1 to 5, to gauge the amount of effort required to monitor their pool assets. 1 being LPs have to always keep a lookout and 5 being LPs can sleep on it.
1. Balancer v2
An AMM protocol OG, Balancer is a pioneer of another AMM tech of varying pool weightage. Only at Balancer that you can find all sorts of pool weightage like 80/20, 20/20/20/20/20, 60/40 etc.
Balancer recently released their version 2 which introduces a different pool architecture named vault.