What is pool weight in defi?

Pool Weights. The weight of each pool determines what proportional share of each block’s Bao reward it gets . The standard base weight of 250 for ETH main net and 750 for xDai was used. Projects were scored higher or lower than that based on factors including liquidity, volatility and income potential.

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What impermanent loss is?

Impermanent loss (IL) is the risk that liquidity providers take in exchange for fees they earn in liquidity pools . If IL exceeds fees earned by a user when they withdraw, it means the user has suffered negative returns compared with simply holding their tokens outside the pool.

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What are Uniswap fees?

Every time a trade is executed on Uniswap, liquidity providers (LPs) earn fees proportional to the amount of liquidity they have supplied. This fee is usually set at 0.3% but can be as low as 0.05% for stable assets, and as high as 1% for more exotic pairs .

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