Impermanent Gain

Impermanent Gain is the Antimatter of Impermanent Loss


Impermanent Gain can be regarded as the antimatter of impermanent loss. Impermanent Gain consists of two ERC20 tokens: Long token and Short token, which are empowered to long or short the IL. By holding the Long token, it will be able to offset the IL of holding a certain size of LP position. Therefore, liquidity providers can hedge against the risk of impermanent loss through Impermanent Gain.

Generally, it would require holding Long tokens with the amount of 10% of your position size to hedge against the potential impermanent loss of your LP position.

For example, a liquidity position of 1000 DAI requires 100 Long to hedge against impermanent loss. The cost of acquiring 100 Long tokens can be regarded as a premium.

Impermanent Gain can help liquidity providers perfectly hedge against a 0 ~ -10% impermanent loss. Only when IL exceeds -10% would cause liquidity provider with Long tokens to suffer additional loss.

Learn More about Impermanent Gain on Medium: Medium Story for iGain (in detail)