Are There Specific AMM Designs Intended to Mitigate Impermanent Loss for Stablecoin Pairs?

Yes, AMM designs like Curve's "stableswap" invariant are specifically created to mitigate impermanent loss for stablecoin pairs and other pegged assets. These designs use a hybrid curve that behaves like a standard AMM curve when prices diverge significantly, but acts more like a linear exchange function near the peg.

This structure allows for much deeper liquidity and lower slippage for trades near the 1:1 ratio, effectively minimizing the impact of price divergence and thus impermanent loss in the desired range.