Liquidity subnet addresses impermanent loss concerns
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Miners report that frequent token swaps required to maintain liquidity positions incur substantial fees on Uniswap, with swaps exceeding twice daily eliminating profits despite fixed daily TAO rewards. Impermanent loss from price volatility further reduces returns when denominated in USD. The team plans to introduce an alternative liquidity provision mechanism without impermanent loss within the coming months.
- •1% swap fees on $30k TVL positions consume ~1 TAO per transaction
- •Multiple daily swaps needed for stability eliminate profitability
- •New IL-free liquidity mechanism coming in next couple months
Distilled from 3 team messages in the official Bittensor Discord. Generated by Claude Haiku 4.5.