RE: RE: DeFi for Dummies?
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RE: DeFi for Dummies?

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Impermanent loss over time can be a large risk in DeFi farms. If CUB goes up to $50 over time (totally possible), and you have all of $1000 in the CUB/BUSD ($500/$500) farm (with CUB at $2.50). You would end up with $2236 BUSD and 44 CUB. So the value of your pool went up, your pool is now worth $4472. However, if you held CUB in the Den, The 200 Cub you had in that pool would be worth $10,000. This is an extreme example to show that impermanent loss can make you lose. There are plenty of impermanent loss calculators online. I used this one to calculate this example.