Risks associated with LP

There are risks when you provide liquidity on either thorchain or mayachain. when you pool on either thorchain or mayachain, your deposit is balanced into 50:50 ratio(RUNE: ASSET)(CACAO:ASSET). you are exposed to the price action of both the assets. there is a risk of Impermanent Loss. Due to synthetics on thorchain , your liquidity position is levered on the price ratio of (RUNE:ASSET). If this ratio is decreasing, LP’ers could indeed face negative APR, i.e. losses. Conversely, if the ratio is increasing, LP would likely make more profit. also there is always a risk of protocol being hacked, thorchain has many security measures taken in place, in order to minimize such type of risks. here are some more resources regrading liquidity pooling: https://docs.thorchain.org/understanding-thorchain/roles/liquidity-providers https://crypto-university.medium.com/thorchain-being-a-liquidity-provider-81522a1a673c https://crypto-university.medium.com/distinguishing-between-price-exposure-and-impermanent-loss-in-asymmetrical-lping-f3fcd0e84887 https://crypto-university.medium.com/under-the-hood-liquidity-pool-apr-3e5e662e6675 Note: Impermanent Loss Protection (ILP) has been Completely deprecated on thorchain,

Mayachain still offers Impermanent Loss Protection (ILP). and there are no synthetic assets on Mayachain.

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