Understanding Impermanent Loss with Providing Liquidity (for Zilliqa or for other Cryptocurrencies)

Hey guys, welcome back to Zilliqa Zebra. If you have been actively providing liquidity on Zilliqa, then you would have heard of the term “Impermanent Loss”. Impermanent loss occurs when the price of your tokens varies as compared to when you first deposited them in the pool. The larger the change, the bigger is your loss. If you want to find out more about impermanent loss and how it can impact you, this video is for you.

Content
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1. Providing Liquidity Has Its Risks
2. Automated Market Maker
3. Why the need for liquidity?
4. Let's look at an example
5. gZIL's price increases to 400ZIL
6. You then decide to withdraw the funds
7. General Formula
8. How do you prevent impermanent loss?

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