Is passive market making profitable?
Quick Take
- Passive liquidity providers earn trading fees but suffer from impermanent loss when the price ratio of their pooled assets change
- SushiSwap pairs typically had lower volume-to-liquidity ratios than their Uniswap counterparts, resulting in lower returns for SushiSwap liquidity providers
- Providing liquidity to stablecoin pairs could generate more than a 10% annual yield
This research piece is available to
members of The Block Genesis.
You can continue reading
this Genesis research on The Block.
Go to Source
Author: Eden Au
