Explain How a Stablecoin-to-Stablecoin Pool Minimizes Impermanent Loss

Impermanent loss is a function of the price ratio divergence between the two assets. In a stablecoin-to-stablecoin pool, both assets are designed to maintain a peg of $1, meaning their price ratio should ideally remain 1:1.

As long as the peg holds, the price divergence is minimal, and therefore the impermanent loss is near zero. This makes such pools a low-risk option for LPs, often utilizing specialized AMMs like StableSwap for maximum efficiency.