Overview
Reduce the risk of Impermanent Loss with DefiPlaza's CALM algorithm.
Last updated
Reduce the risk of Impermanent Loss with DefiPlaza's CALM algorithm.
Last updated
DefiPlaza on Radix is a DEX specifically designed to reduce the risk of Impermanent Loss and help make DeFi sustainably profitable.
Impermanent Loss is a huge problem for LPs. In the first six months of Uniswap V3, LPs lost a staggering $60M because while $200M in fees was generated, over $260M of IL occurred.
While most DEXes try to counter this problem by increasing trade volume by adding liquidity concentration and decreasing fees, we learned that to optimize LPs' profitability; we must focus on decreasing Impermanent Loss.
CALM reduces the risk of Impermanent Loss by treating trades that increase IL differently from trades that decrease IL. To do so, CALM keeps a record of each pair's IL and uses two distinct pricing functions, picking trade quality over trade quantity and favoring LP profitability over trader profitability.
Our co-founder Timan walks you through DefiPlaza on Radix ans shows you how to swap tokens, add liquidity and how to create a new pair for a new token in this short video: