According to a survey, 49% of uniswap V3 LPs are losing money. A lot of people are afraid of impermanent loss while providing AMM liquidity, especially uniswap V3 amplifies the impermanent loss. However, most people do not know how to calculate the impermanent loss of uniswap V3. Now let’s deduce in detail how to calculate this:
V3 LP satisfies:
Then the price satisfies:
Obtained from the above solution:
Assuming liquidity L is set within the price range of (Pa, Pb) at p0,
Then at Pn, only the market value of just holding:
Then the value of the position of V3:
Then the impermanent loss of V3:
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Official website: http://x3.finance/
Introduction Video: https://www.youtube.com/watch?v=w1aI2hgy6rQ
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