Liquidity SN77 exploring impermanent loss solutions
Share
Team acknowledged that miners providing liquidity face high swap costs and impermanent loss (IL) that can eliminate daily TAO rewards. Frequent rebalancing on Uniswap incurs 1% fees per swap, forcing LPs to choose stable market windows. A new liquidity provision method without IL is planned for release within the next couple of months.
- •Swap fees + price volatility can eliminate daily profit if LPs rebalance more than twice daily
- •One-way token movements cause USD-denominated losses even when TAO rewards are fixed
- •New IL-free liquidity mechanism coming in ~2 months
Distilled from 3 team messages in the official Bittensor Discord. Generated by Claude Haiku 4.5.