# Thoughts On Impermanent Loss?

**URL:** <https://gov.uniswap.org/t/thoughts-on-impermanent-loss/2102>\
**Category:** Uncategorized\
**Created:** [September 18, 2020, 4:12am UTC](https://gov.uniswap.org/t/thoughts-on-impermanent-loss/2102 "2020-09-18T04:12:41Z")\
**Posts on this page:** 5\
**Page:** 1

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**Author:** ![Zer0dot](https://sea2.discourse-cdn.com/flex016/user_avatar/gov.uniswap.org/zer0dot/32/400_2.png) [@Zer0dot](https://gov.uniswap.org/u/Zer0dot)\
**Post date:** [September 18, 2020, 4:12am UTC](https://gov.uniswap.org/t/thoughts-on-impermanent-loss/2102/1 "2020-09-18T04:12:41Z")

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Hey there folks!

First off, I’d like to say a big THANK YOU to Hayden Adams and the Uniswap core devs for seriously making financial history. Uniswap is an amazing step towards decentralization of core financial services, and I can’t wait to see where it is in a few years! (Finance student here 😆)

Anyway, I was wondering if anyone here had any thoughts relating to _impermanent loss._

Should Uniswap governance work towards mitigating impermanent loss through means like oracles (Bancor V2 I believe) or another creative solution?

Let’s have a discussion!

_P.S. I’m not actually that well versed in how smart contracts work, including technical limitations of running on chain. If this isn’t possible, let me know!_

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**Author:** ![Tommyb1](https://sea2.discourse-cdn.com/flex016/user_avatar/gov.uniswap.org/tommyb1/32/470_2.png) [@Tommyb1](https://gov.uniswap.org/u/Tommyb1)\
**Post date:** [September 18, 2020, 8:33am UTC](https://gov.uniswap.org/t/thoughts-on-impermanent-loss/2102/2 "2020-09-18T08:33:37Z")

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My understanding of impermanent loss is that it is the risk of providing liquidity. Reducing this for liquidity providers, will probaly reduce the liquidity.

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**Author:** ![Zer0dot](https://sea2.discourse-cdn.com/flex016/user_avatar/gov.uniswap.org/zer0dot/32/400_2.png) [@Zer0dot](https://gov.uniswap.org/u/Zer0dot)\
**Post date:** [September 18, 2020, 5:02pm UTC](https://gov.uniswap.org/t/thoughts-on-impermanent-loss/2102/3 "2020-09-18T17:02:58Z")

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~~It might be a necessity, you’ve got a good point. Another way to look at impermanent loss would be an overall reduction in relative volatility. Interested to hear what other community members have to say!~~

This is a lot more nuanced. I’m retracting this statement, impermanent loss happens on both sides, but it isn’t the only factor in the equation.

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**Author:** ![mountain720](https://sea2.discourse-cdn.com/flex016/user_avatar/gov.uniswap.org/mountain720/32/539_2.png) [@mountain720](https://gov.uniswap.org/u/mountain720)\
**Post date:** [September 18, 2020, 5:38pm UTC](https://gov.uniswap.org/t/thoughts-on-impermanent-loss/2102/4 "2020-09-18T17:38:51Z")

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I’ve thought about it a little, and, that’s why held off on putting any UNI into an LP right away. Anyone that added liquidity early on to ETH-UNI, or really any UNI pool is just losing UNI as the price rises so fast in relation to the other in the pair at this point. I want to keep my UNI! Maybe add liquidity one day, if the price (somewhat) stabilizes, or, maybe if rewards are offered in an ETH-UNI pool. But even that’s still a maybe. I’d rather just hold the UNI, and be able to vote, and other things.

What exactly are the creative solutions, with oracles, or others?

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**Author:** ![Noah](https://sea2.discourse-cdn.com/flex016/user_avatar/gov.uniswap.org/noah/32/225_2.png) [@Noah](https://gov.uniswap.org/u/Noah)\
**Post date:** [September 26, 2020, 10:00pm UTC](https://gov.uniswap.org/t/thoughts-on-impermanent-loss/2102/6 "2020-09-26T22:00:13Z")

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