For instance, for example an LP deposits liquidity into an ETH-BTC pool at a time when 1 BTC equals 10 ETH. A month later, the worth of ETH doubled whereas BTC hasn’t modified. When this disparity happens, arbitrage merchants will leap on the alternative to purchase ETH from that pool and promote it on a DEX at a better value thereby bringing the pool ratio and token costs again to market price. This might damage a depositor or profit them, relying on which aspect of the commerce they’re on.
