Important DeFi Concepts

Important DeFi concepts to understand and choose your risk level.

Impermanent Loss

Impermanent loss happens when you provide liquidity to a liquidity pool, and the price of your deposited assets changes compared to when you deposited them. The bigger this change is, the more you are exposed to impermanent loss. In this case, the loss means less dollar value at the time of withdrawal than at the time of deposit.

Epsylon is focused on Pools that contain assets that remain in a relatively small price range:

• Stablecoins

• Wrapped versions of a coin

• Pegged Tokens

These tokens will stay in a relatively contained price range. Therefore, the risk of impermanent loss for liquidity providers (LPs) is very low.