More Defi - One Protocol, combining lending and trading into one protocol.
How Do You Hedge Impermanent Loss in DeFi
Impermanent loss (IL) is the hidden tax on liquidity providers. It happens because AMMs rebalance tokens whenever prices move. If one asset in the pool pumps, the protocol automatically sells part of it to buy the other side. But that means users end up with fewer of the winner and more of the loser. The gap between what you’d have if you just held vs what you actually have in the pool is IL. Take ETH/USDC on Uniswap as an example. Suppose you deposited $5,000 worth of ETH and $5,000 in USDC ...
How Do You Hedge Impermanent Loss in DeFi
Impermanent loss (IL) is the hidden tax on liquidity providers. It happens because AMMs rebalance tokens whenever prices move. If one asset in the pool pumps, the protocol automatically sells part of it to buy the other side. But that means users end up with fewer of the winner and more of the loser. The gap between what you’d have if you just held vs what you actually have in the pool is IL. Take ETH/USDC on Uniswap as an example. Suppose you deposited $5,000 worth of ETH and $5,000 in USDC ...
Why Stacking Primitives Doesn’t Work: Rethinking DeFi Architecture from the Ground Up
DeFi was built on modularity. Instead of closed, vertically integrated systems, we got smart contracts that could snap together like money Legos. You could take an AMM, layer lending on top, wrap tokens, automate strategies, and build something new. Composability became more than a feature, it turned into a design philosophy. But over time, the cracks started to show. Many attempts to combine lending and trading ended up adding more complexity than efficiency. Latency increased. Liquidity bec...
Why Stacking Primitives Doesn’t Work: Rethinking DeFi Architecture from the Ground Up
DeFi was built on modularity. Instead of closed, vertically integrated systems, we got smart contracts that could snap together like money Legos. You could take an AMM, layer lending on top, wrap tokens, automate strategies, and build something new. Composability became more than a feature, it turned into a design philosophy. But over time, the cracks started to show. Many attempts to combine lending and trading ended up adding more complexity than efficiency. Latency increased. Liquidity bec...
