Lixir Docs
Impermanent Loss
The term used for Inventory Risk when market making through an AMM
In periods of high volatility, the risk of financial loss due to Impermanent Loss can be significant. The Lixir Vaults currently re-establish the LP range approximately every 6 hours to minimize the risk of significant IL, but a wild price swing between two of these consecutive re-range actions can still cause many percentage points of loss w.r.t. HODLing. The longer one provides liquidity, the more this risk diminishes as the LP fees and LIX farming rewards compensate any suffered IL over time.
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