Impermanent Loss Tutorial | How to Calculate
Welcome to this cryptocurrency and defi video by Gabriel Haines. This is one of the best impermanent loss example videos online. It is very informative and can help you to better understand yield farming and the risks that come with it.
Gabriel uses the yield farming optimizer Defiyield.info while he walks us through calculating the impermanent loss of a WETH/DPI pool.
Example 1: Both assets fluctuate the same
If both assets move parallel to one another and experience the same gains and losses there will be no impermanent loss.
Example 2: One asset outperforms the other
If one asset goes up while the other does not go up as much or perhaps even falls. This will create an arbitrage like situation where you will have impermanent loss.
Check out the video above to learn more about impermanet loss!