What Are the Risks of Using a Stableswap Curve for a Non-Pegged, Volatile Asset Pair?

Using a stableswap curve for a non-pegged, volatile asset pair poses a significant risk because the curve is optimized for minimal price movement. The high amplification factor would concentrate liquidity in a narrow, incorrect range, leading to extreme slippage and rapid depletion of one asset as the price inevitably diverges.

Arbitrageurs would quickly drain the appreciating asset, leaving LPs with only the depreciating one. The design is fundamentally unsuitable for volatile assets that are expected to have significant, sustained price ratio changes.