Why Is Impermanent Loss Generally Lower for Stablecoin Pairs in an AMM?

Impermanent loss is lower for stablecoin pairs because the assets are designed to maintain a 1:1 price peg. Since IL is caused by a change in the relative price ratio, the stable nature of the assets minimizes this divergence.

As long as the peg holds, the price ratio remains near 1, significantly reducing the opportunity cost compared to volatile pairs. This makes stablecoin pools a popular choice for risk-averse LPs.