Heyyo Stonfiers, it's a new day to start the week with some profits. As a trader/crypto investor our aim is to always make profits but in this crypto space, market do fluctuate in which various certain tokens start to dip from their actual price. This is refer to as "Loss" and nobody wants that, which is why I bring to you the Impermanent Loss Protection introduced by Stonfi.

What are the possible causes of Impermanent loss:

1. Price volatility: Large price swings in the assets provided as liquidity can lead to impermanent loss.

2. Asset price divergence: When the prices of the assets in the pool diverge significantly, it can cause impermanent loss.

3. Market fluctuations and trends: Broader market trends and fluctuations can impact the value of assets in the pool, leading to impermanent loss.

Just to mention a few, all these contributes to the causes of Impermanent loss when traders provide liquidity to a certain pool. As a crypto enthusiast, you need to keep it in mind that impermanent loss is a natural risk associated with providing liquidity to pools. It's essential for you as a liquidity providers to understand and manage these risks.

Okay for example let say you engaged on a liquidity pool with #HPO and #TON , with an initial composition of:

#HPO : 50% (1000 HPO = $1000) priced at $1

#TON : 50% (200 TON = $1000) priced at $5

Total Liquidity value: $2000

Now, suppose there's a change in market sentiment, and the demand for HPO increases. As a result, the price of HPO rises by 20%, while the price of TON remains relatively stable.

This is how the portfolio would look like:

HPO: 55% (1000 HPO = $1200) $200 profit

TON: 45% (200 TON = $1000)

Total New Value: $2200

In this scenario, the liquidity provider's assets have increased in value due to the market sentiment change. However, if the market sentiment reverses, and the price of HPO drops, the liquidity provider may experience an impermanent loss.

For example, if the price of HPO drops by 30%, the new composition would be:

$1200 x 0.30 = $360

$1200 - $360 = $840

HPO: 1000 HPO now $840

TON: 200 TON - $1000

Total New Value: $1840

The impermanent Loss incurred in this example now is

= $2200 - $1840

= -$360

Now a $2000 investment that pumped up to a sum $2200 due to the market fluctuation dipped to $1840 leaving the asset with a devastating loss of $360. This outcome can lead to depression and it could discourage traders from providing liquidity to any other pool going forward.

Now with STONfi you can mitigate 5.72% of this loss if you provide liquidity to the STON/USDT V2 Pool.

If you’re a liquidity provider like me, I highly recommend checking out STONfi's Impermanent Loss Protection. Trust me, you won’t regret it!

Now Here is How it Works:

  • They’re launching the IL STON/USDT V2 pool.

  • You can offset up to 5.72% of your impermanent loss even on a 50% decrease in asset price.

  • STONFI has set a monthly offset budget of $10,000.

  • You can receive up to $100 in STON tokens. There’s no need to file any claims, you’ll be credited automatically!

The ILP benefits would have closed because the offset period was from December 12, 00:00 UTC to December 31, 23:59 UTC but all thanks to the STONFI team for their love to the community, Stonfiers can now enjoy more benefits of the Impermanent Loss protection as it has been extended from January 1st to 31st, 2025. You can enjoy top-tier protection for your liquidity in the STON/USDT v2 pool.

This is part of what makes STONfi a unique Defi platform, you’ll be amazed when you find other amazing features that lie within STONFI DEX.

Here is the link to the pool 👇🏼 (https://app.ston.fi/pools/EQBbsMjyLRj-xJE4eqMbtgABvPq34TF_hwiAGEAUGUb5sNGO)

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