UNISWAP: Impermanent Loss and Risk Profile of a Liquidity Provider
نویسندگان
چکیده
Uniswap is a decentralized exchange (DEX) and was first launched on November 2, 2018 the Ethereum mainnet [1] part of an Ecosystem products in Decentralized Finance (DeFi). It replaces traditional order book type trading common centralized exchanges (CEX) with deterministic model that swaps currencies (or tokens/assets) along fixed price function determined by amount supplied liquidity providers. Liquidity providers can be regarded as investors earn commissions per trade. They lock up funds pools for distinct pairs allowing market participants to swap them using function. take risk provider earning each Here we analyze profile so called impermanent (unrealized) loss particular. We provide corrected version commonly denoted v2 semi-infinite domain. The differences between v3 are also discussed.
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ژورنال
عنوان ژورنال: Social Science Research Network
سال: 2021
ISSN: ['1556-5068']
DOI: https://doi.org/10.2139/ssrn.3872531