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How Is Impermanent Loss Minimized in a Stablecoin-Only Liquidity Pool?

Since stablecoins maintain a near 1:1 price ratio, the price divergence that causes impermanent loss is virtually eliminated.
Greeks.Live22.11.25

How Is Impermanent Loss Minimized in a Stablecoin-Only Liquidity Pool?

Impermanent loss occurs when the price ratio of assets in a liquidity pool changes after deposit. In a stablecoin-only pool (e.g.

USDC/DAI), the assets are expected to maintain a 1:1 price ratio. Since the price ratio is nearly constant, the risk of impermanent loss is drastically minimized, allowing liquidity providers to earn trading fees with low price risk.

What Is the Concept of “Divergence Loss” in Relation to Impermanent Loss?
How Does the Concept of “Divergence Loss” Relate to Impermanent Loss?
Why Are Stablecoin Pools Less Susceptible to Significant Impermanent Loss?
Explain How a Stablecoin-to-Stablecoin Pool Minimizes Impermanent Loss

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