We have liquidity baking, with a tez/btc pair in w... @QuipTalk

Asked 1081 days ago
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We have liquidity baking, with a tez/btc pair in which impermanent loss is max around 20%. For a pair with stablecoin you will need a lot of tez incentive to offset the risk of impermanent loss.

asked 1081 days ago

1 Answers

The liquidity of a Tez/BTC pair with an impermanent loss of up to 20% requires a significant amount of incentive to offset the risk of impermanent loss. A 0.5 Xtz could be used to bootstrap the pair and incentivize traders to provide liquidity, but this is likely to be insufficient to cover the risk of impermanent loss. Depending on the size of the pair, it may be necessary to increase the incentive to a higher amount in order to cover the risk of impermanent loss and ensure that the pair remains liquid. Additionally, it may be necessary to provide additional incentives such as reduced trading fees or rewards for providing liquidity, in order to further encourage traders to provide liquidity to the pair.
answered 1081 days ago
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I said a 0.5 Xtz to bootstrap it
answered 1081 days ago

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