Volatility and Impermanent loss
In a volatile marketplace, impermanent loss is almost guaranteed when staking cryptocurrency assets within a standard liquidity pool. Impermanent loss occurs no matter which direction the tokens prices go (for a token trending upward, impermanent loss represents an opportunity cost). The more the tokens diverge, the greater the impact of the impermanent loss. Therefore, the level of the CVI index is a good indicator for the expected impermanent loss that will occur from future market volatility.
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