Are you curious about the world of DeFi but worried about losing your hard-earned assets to impermanent loss (IL)? I get it—I've been there. My early foray into liquidity farming was full of ups and downs, where volatile markets turned promising opportunities into frustrating losses. But everything changed when I discovered STON.fi and its revolutionary approach to IL protection.
Here’s my journey, complete with a beginner-friendly guide to help you get started.
What Is Impermanent Loss, and Why Does It Matter?
Impermanent loss occurs when the value of assets in a liquidity pool fluctuates, potentially leaving you with less than if you had held the assets individually. It’s called “impermanent” because the loss is only realized when you withdraw your funds. Here’s a simple analogy:
Imagine you own double items say, a rare coin and a piece of art. You add them to a shared trading pool, earning a cut of the fees when others trade these items. If the coin’s value soars while the art’s value remains the same, the pool rebalances, and your share might be worth less than the items’ individual values.
The Impermanent Loss Nightmare: My DeFi Struggles
Picture this: I staked LP tokens in a top-tier farm, eagerly awaiting profits. The markets seemed stable—until they weren’t. One token’s price skyrocketed, disrupting the balance in the pool. Instead of celebrating gains, I faced losses greater than if I’d simply held the tokens. My confidence in DeFi was shattered, and I began questioning whether this was worth the risk.
Meet STON.fi: The Solution to Impermanent Loss
Just as I was about to give up on DeFi, I found STON.fi—a game-changing platform offering robust impermanent loss protection. Their innovative features not only restored my confidence but also turned liquidity farming into a sustainable and rewarding venture.
Here’s how STON.fi transformed my approach:
1. A Shield Against Price Volatility
STON.fi’s IL protection acts like a safety net, absorbing the impact of sudden price swings. Instead of anxiously watching market charts, I could farm with peace of mind, knowing my potential losses were minimized.
2. Fair Rewards for Your Efforts
With STON.fi, I no longer had to sacrifice rewards to offset IL. The platform compensates users for potential losses, ensuring liquidity farming remains profitable regardless of market conditions.
3. Transparency You Can Count On
STON.fi’s IL protection mechanism is clear and straightforward. As long as you meet the staking duration requirements, you’re eligible for compensation. This level of transparency was a breath of fresh air in a space often clouded by complexity.
How STON.fi Protects Against Impermanent Loss
STON.fi’s Guardian Program is a revolutionary feature that mitigates the effects of IL.
Here’s how it works:
🫧Impermanent Loss Offset of Up to 5.72%: Protects your assets even during significant market downturns (up to a 50% price drop).
🫧Monthly Protection Budget: A $10,000 fund supports liquidity providers.
🫧Effortless Compensation: IL protection is automatic—no need for manual claims.
🫧Beginner-Friendly Interface: Forget complex calculations; the platform handles it all.
A Beginner’s Guide to Farming on STON.fi
Do you think you are ready to give it a try?
This January, from the 1st to the 31st, 2025, it is possible to benefit from advanced protection in the STON/USDT v2 pool because our investments deserve better.
I'm providing a step-by-step guide to start farming with confidence on STON.fi:
🪜 Step 1: Connect Your Wallet
Visit STON.fi and connect your preferred wallet (e.g., Tonkeeper, Tonhub). It’s quick and secure.
🪜 Step 2: Provide Liquidity
Head to the “Liquidity” tab and choose the STON/USDt V2 pair. Deposit equal amounts of STON and USDt tokens to receive LP tokens. Don’t have STON? Swap other tokens directly on the platform.
🪜 Step 3: Stake Your LP Tokens
Navigate to the “Pools” section and stake your LP tokens in the STON/USDt V2 farm. Watch your rewards grow in real-time.
🪜 Step 4: Monitor Your Earnings
Your rewards start accumulating instantly. There are no lock-up periods, so you can claim your earnings anytime.
🪜 Step 5: Unlock Impermanent Loss Protection
Keep your LP tokens staked for the required duration to qualify for IL protection. This feature ensures you’re compensated for any losses, making farming safer and more sustainable.
Here's the idea to maximise your benefits:
Keep your LP tokens staked for the required duration. This qualifies you for STON.fi's Impermanent Loss protection(ILP), which compensates you for any IL incurred, making farming safer and more sustainable.
HOW TO CALCULATE IMPERMANENT LOSS ON STON.fi
Worry less about impermanent loss! STON.fi offers a built-in Impermanent Loss Calculator to help you understand potential risks before you provide liquidity.
There are two main ways to calculate impermanent loss:
1. The Direct Method:
Step 1: Find your initial deposit value. Convert the value of your deposited tokens to a stablecoin like USDC at the time you deposited them.
Step 2: Calculate your withdrawal value. Convert the value of your current holdings (both tokens) back to the same stablecoin.
Step 3: Check for impermanent loss. If the current value in USDC is less than the initial value, you've incurred an impermanent loss.
2. Using the Impermanent Loss Curve Function:
This method uses a built-in function that directly relates price changes to the amount of impermanent loss.
Step 1: Input price change. Enter the percentage change in the price of one of your deposited assets since you made the deposit.
Step 2: Calculate impermanent loss. The calculator will automatically determine the corresponding percentage of impermanent loss based on the price change.
Trading fees earned while providing liquidity can help offset potential impermanent loss.
Why STON.fi Should Be Your DeFi Go-To
With STON.fi’s Impermanent Loss protection, I can focus on building a profitable farming strategy without the constant fear of market fluctuations. Whether you’re a seasoned farmer or a beginner, STON.fi empowers you to farm smarter, not harder.
Take Control of Your DeFi Journey
DeFi doesn’t have to be a gamble. With tools like STON.fi’s Guardian Program, you can confidently explore liquidity farming while minimizing risk. Don’t let impermanent loss hold you back—start farming like a pro today.
Ready to build your DeFi empire? Visit STON.fi and take the first step toward financial freedom!
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