How much BNT impermanent loss protection can the 0.25% withdrawal fee cover?

Bancor V3 has upgraded the impermanent loss protection on the basis of V2. V2’s impermanent loss protection requires the single assets to be staked for 100 days to obtain 100% impermanent loss protection, while V3 provides the impermanent loss protection time to 7 days, meanwhile the single-sided farms need to pay 0.25% withdrawal fee, which may limit malicious arbitrage to a certain extent. But how much impermanent loss protection can the 0.25% withdrawal fee cover? Still based on the formula we derived earlier:

It can be obtained that Pn/P0=1.1080 or 0.9070, that is, the price fluctuation range is between -9.3% and 10.8%, and the 0.25% withdrawal fee can completely cover the loss caused by impermanent loss protection. It is normal to fluctuate 10% within a week due to the high volatility of cryptocurrencies. Therefore, in most cases, the 0.25% withdrawal fee cannot completely cover the loss of impermanent loss protection, but only reduces the loss to a certain extent. Of course, for liquidity providers, more than 0.25% profit within a week means that the annualization exceeds 13% to achieve capital preservation, which also inhibits the short-term withdrawal demand of liquidity providers to a certain extent. Therefore, if the single-side pair is highly volatile, the impermanent loss of BNT is more likely to cause losses, and the more liquidity providers have short-term adding and removing liquidity, leading to the higher the cost of BNT impermanent loss.