About Unequal-Weight Market Making
Last updated
Last updated
Most Swaps have a market-making ratio of 50/50, that is, 50% of the total value of each of the tokens in the transaction pair is deposited, but 50/50 transaction pairs often bring great risks to users.
Comparison of the impermanent loss caused by different proportions of market-making, with calculations:
As can be seen from the above table, assuming that the trading pair is EOS/USDT, when the price of USDT stays unchanged and EOS raises and falls in price:
50/50 impermanent loss> 80/20 impermanent loss> 98/2 impermanent loss
This shows that different market-making ratios will bring different effects to impermanent loss.
Impermanent loss calculator: https://coinmarketcap.com/yield-farming/