Impermanent loss
is inevitable. Losing isn’t.
Providing liquidity often pays less than simply holding. See the gap for yourself, and the three ways Ammalgam lets you outearn it, cancel it, or flip it.
Pool
Deposit
$Just holding
$12,000
+20.0%
the do-nothing baseline
Classic AMM LP
$12,029
+20.3%
+$29 vs holding
Ammalgam
$12,177
+21.8%
+$177 vs holding
What is impermanent loss?
Deposit two tokens into an AMM pool and the pool keeps them in balance for you: as one token rises, arbitrage traders buy it out of the pool, so you end up holding less of your winner and more of the other side. Impermanent loss is the gap between what your LP position is worth and what simply holding both tokens would be worth.
Just holding
$9,000
1 ETH + 3,000 USDC after ETH 2×
vs
In the pool
$8,485
−$515 (−5.7%) impermanent loss
The loss is symmetric (a 2× pump and a 50% dump cost the same) and it accelerates with the size of the move, no matter how long the move takes:
price move
2×
−5.7%
vs holding
price move
3×
−13.4%
vs holding
price move
5×
−25.5%
vs holding
What offsets it is income that accrues with time: trading fees, and on Ammalgam, lending yield. That is why the maps above have a time axis: the real question for any LP is whether income outruns the loss, and that is a race between price moves and days elapsed.
Want the slower, chart-by-chart walkthrough? Read the plain-language explainer.
How Ammalgam changes it
The DLEX is an AMM and a lending market in one pool, the first where you can borrow not just tokens but liquidity itself. That single unlock turns impermanent loss from a fate into a choice:
Ammalgam LP
Same position, more yield
An Ammalgam LP earns the same swap fees as a classic AMM, plus lending interest from traders borrowing tokens and liquidity from the pool. Idle capital never sleeps, so the map greens faster.
Best when: You would LP anyway and want lending yield on top of fees.
Hedged LP
Cancel the direction
Borrow the volatile token against your LP position to go delta-neutral. What remains is the small, symmetric cost of impermanent loss, steadily outrun by fees and lending yield.
Best when: You want the yield without calling the direction.
Straddle
Own the other side
Borrow liquidity itself and the payoff inverts: big moves in either direction pay you. That is impermanent gain. Borrow interest is the premium, exactly like owning a straddle.
Best when: You expect a big move soon, but not its direction.