
This person provides liquidity in exchange pools (Liquidity Pool) like Uniswap. They see the "50% APY" figure and feel like they are making a huge profit. However, they refuse to acknowledge the fact that the price of one of the coins they deposited has fallen drastically. Due to the automatic rebalancing mechanism (Impermanent Loss), their assets have actually shrunk in value compared to if they had just left them in their wallet. They show off the interest they earned, while turning a blind eye to the principal that has been lost.
No comments