How Does The Impermanent Loss Protection Work?
Update: Impermanent Loss Protection (ILP) has been depreciated with the introduction of Saver Vaults. Only positions held before the depreciation of IPL will be protected. Any new LP position will not have ILP, also if an old position gets added new funds to the membership the ILP will be lost too.
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THORChain offers impermanent loss protection of 1% a day, which means after 100 days you are entitled to 100% reimbursement of your impermanent loss. This means after 100d you will minimum get out what you put in (not in dollar terms but crypto asset you provided).
- 1.You provide 1000 BUSD asymmetrical to the BUSD pool.
- 2.At time of writing this converts automatically to 500 BUSD ($500), and 125 Rune ($500), totalling $1000.
- 3.Rune is fluctuating and redeemable amount is let's say 300 BUSD ($300) and 200 Rune ($450).
- 4.You have an impermanent loss. 5) this loss gets covered 1% per day i.e. after 100% you get reimbursed minimum 500 BUSD and 125 Rune.
Please note that the IL is not calculated based on dollar terms but digital asset terms.
- 1.You provide 1 BTC asymmetrical to the BTC pool.
- 2.At time of writing this converts automatically to 0.5 BTC ($20k), and 5000 Rune ($20k), totalling $40000.
- 3.Rune and BTC price are fluctuating and redeemable amount is 0.4 BTC and 6200 Rune totalling $29000.
- 4.You have an impermanent loss.
- 5.This loss gets covered 1% per day i.e. after 100% you get reimbursed minimum 0.5 BTC and 5000 Rune.
Please note that the IL is not calculated based on dollar terms but digital asset terms.
Last modified 1mo ago