This is something new that I have not heard of before.
Look what I found today in Crypto news, from CoinTelegraph.
https://cointelegraph.com/explained/what-is-impermanent-loss-and-how-to-avoid-it
Liquidity provisioning is only profitable on typical AMMs if the benefits of farming surpass the cost of temporary loss. However, if the liquidity providers suffer losses, they can utilize ILP to protect themselves against impermanent loss.
To activate ILP, tokens must be staked on a farm. Let's use the example of the Bancor Network to understand how ILP works. When a user makes a new deposit, the insurance coverage provided by Bancor grows at a rate of 1% per day the stake is active, eventually reaching full range after 100 days.
Any temporary loss that happened in the first 100 days or at any time after that is covered at the time of withdrawal by the protocol. However, only partial IL compensation is available for withdrawals made before the 100-day maturity. For instance, after 40 days in the pool, withdrawals receive a 40% compensation for any temporary loss.
Can anyone give an example of an existing ILP?
