The returns would vary for investors who provided liquidity at different times due to different ETH/DAI prices.
Read moreWhat is Uniswap liquidity pool?
Each Uniswap liquidity pool is a trading venue for a pair of ERC20 tokens . When a pool contract is created, its balances of each token are 0; in order for the pool to begin facilitating trades, someone must seed it with an initial deposit of each token.
Read moreWhat does adding liquidity to Uniswap do?
Uniswap incentivizes users to add liquidity to trading pools by rewarding providers with the fees generated when other users trade with those pools . Market making, in general, is a complex activity.
Read moreWhat 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 .
Read moreWhat is Uniswap v3?
UniSwap is a protocol that allows traders to swap Ethereum ERC20 tokens without using an order book . The swap rate is based on the demand for both tokens and the balances of the swapping pair. Traditional markets heavily rely on liquidity for their success.
Read moreWhat is Uniswap impermanent loss?
Impermanent loss is a phenomenon that occurs to LPs on AMMs when the spot price of the assets they have added to a liquidity pool changes . Since liquidity providers pair two assets together to form a position, the ratio of coins in the position changes when asset spot prices change.
Read moreCan you lose money in Pancakeswap pools?
Impermanent loss If the value of one token in a pair changes, the ratio of tokens in the pool will be altered. This can result in users withdrawing from the pool with more of one token than the other. This could ultimately result in a loss depending on how the market moves.
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