What Is Foliowatch (FWATCH) ?
Foliowatch For liquidity providers in AMM (Automated market making) protocols, one of the primary risks to be aware of is Impermanent Loss (IL). AMM protocols are controlled by an underlying mathematical formula that adjusts the ratios of the assets in the pool while simultaneously determining their prices. While this formula allows the market to function, it is also what is responsible for Impermanent Loss. Impermanent Loss occurs when the mathematical formula adjusts the asset ratio in a pool to ensure they remain at 50:50 in terms of value and the liquidity provider loses out on gains from a deposited asset that outperforms.
Foliowatch , impermanent loss isn?t a great name. It?s called impermanent loss because the losses only become realized once you withdraw your coins from the liquidity pool. At that point, however, the losses very much become permanent. The fees you earn may be able to compensate for those losses, but it?s still a slightly misleading name. This has become a huge risk to DeFi users. (Abstract compiled from Binance Academy)
Foliowatch Point Table