The automated market maker is among the nice improvements of defi, however impermanent loss can be one of many obstacles that hinder its continued growth. The answer of impermanent loss can be one of many essential instructions of defi 2.0. Just lately, the creator noticed a view that multi-token in a single pool can cut back the chance of impermanent loss. Is it true? I’ve a unfavourable angle in direction of this. Quite the opposite, I feel that multi-tokens in a single pool not solely enhance the chance of impermanent losses but additionally enhance the chance of worth publicity. For instance, 16 tokens represent one pool reminiscent of balancer, and a couple of tokens pairs type 8 liquidity swimming pools reminiscent of uniswap. Assuming that the 16 tokens embrace a shit coin reminiscent of luna or UST. As for the primary protocal, 15 tokens within the one liquidity pool can be bought by the AMM protocol. In the long run, all liquidity suppliers’ property can be reset to zero. However as for the second protocol, 16 tokens scattered in 8 completely different liquidity swimming pools, just one liquidity pool together with luna will endure losses, whereas the opposite 7 swimming pools won’t be affected. Based mostly on the above viewpoint, the multi-token liquidity pool mannequin tremendously aggravates the market threat, whereas the dual-token pool separates the market threat very properly. After all, the one with the bottom threat is the single-sided staking mannequin, which can be one of many instructions of our efforts sooner or later.
https://x3finance.medium.com/will-the-impermanent-loss-of-a-multi-token-pool-really-be-lower-768381508f8a
