HiÐΞClassic

[draft] "Impermanent loss" of FLI?

kyoronut | きょろナッツ
4 years ago

In ideal rebalancing case, ETH2x-FLI is thought as an extension of an asymmetric AMM, which is well formalized by Balancer team, with weight of ETH and USDC are 2 and -1, respectively.

Impermanent loss of an asymmetric AMM is also formalized by Balancer team. In 2 assets case, it can be written as:

rw1w+wr1\frac{r^w}{1-w+wr}-1

where rr is price ratio and ww is weight of an asset (sum of weights should be 1).

Let's consider w=2w=2 case:

r21+2r1=(r1)22(r1/2).\frac{r^{2}}{-1+2r}-1=\frac{(r-1)^2}{2(r-1/2)}.

This is positive when r > 1/2.


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kyoronut | きょろナッツ
4 years ago
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