Yield farmers' risks

For yield farmers/liquidity providers with no leverage (opening a position at 1x)

  • Users in this category are exposed to impermanent loss risk. See more about impermanent loss here.
    • Note that impermanent loss risk is minimal in a pool with all stablecoins (e.g. Curve 3pool that consists of USDT, USDC, and DAI)‌

For yield farmers/liquidity providers with leverage (opening a position with more than 1x)

  • Users in this category are exposed to impermanent loss risk. The impermanent loss risk is amplified by the leverage level that users enter at.
    • Note that impermanent loss risk is minimal in a pool with all stablecoins (e.g. Curve 3pool that consists of USDT, USDC, and DAI).
  • Additionally, because of the impermanent loss risk + the fact that users are taking on leverage, users' positions also have liquidation risk.
More details on how to manage/mitigate this risk: see here.
How Alpha Homora v2 mitigates risks for users: see here.
Last modified 6mo ago