Why is the deficit of BNT still widening after pausing impermanent loss protection?

The trend of cryptocurrencies has been picking up recently. BTC has risen by 35%, ETH has risen by 87%, and BNT has also risen by 30% from the bottom. However, the deficit of BNT’s impermanent loss protection is still expanding. Since from the Celsius removing liquidity from Bancor, the BNT’s dollar deficit has expanded from a minimum of 29 million US dollars to more than 37 million US dollars with an increase of nearly 30%.

Shouldn’t the price recovery be a reduction in the deficit? This actually depends on the relative price changes of the two tokens in the liquidity pool that provide impermanent loss protection. BNT has only risen by 30% during this period, while ETH has risen by 87%. Therefore, the price of BNT has dropped by 30% relative to ETH. According to the BNT inflation calculation formula, we can calculate that the deficit of the ETH-BNT single-sided liquidity pool will expand:

So the deficit in BNT has widened by 3.97%, while in US dollars it has widened by (1+3.97%)*(1+30%)-1=35%

Similarly, we can calculate the change in the deficit of the LINK-BNT single-sided liquidity pool as:

So the deficit in BNT widened by 0.17%, while in US dollars it widened by (1+0.17%)*(1+30%)-1=30.2%

As a result, it is not surprising that the deficit has expanded by 30% because BNT’s single-sided staking pool is dominated by ETH-BNT and LINK-BNT.