Impermanent loss on 3 or 4 token pools

Anybody knows if anyone has researched how would liquidity pools and impermanent loss look like on pools with more than 2 tokens ?

X*y*z = k ?

I think it could be a multi variable math nightmare, but I wonder if it would offer opportunities in any way …

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5 thoughts on “Impermanent loss on 3 or 4 token pools”

  1. There are some simulators that can calculate it. It really depends on the assets though. 3 or 4 different assets likely are pretty uncorrelated so the IL risk could be greater if one or two of them really start to deviate in price from the others

  2. It’s (x bal *weight) * (y bal *weight) * (z bal *weight) = k

    It acts similar to off weight pools like balancer 30/70 pools.

    Higher price impact than a 50/50 with the same total liquidity but pretty near price impact of 50/50 where the same liquidity of that individual asset in the pool (more total liquidity)


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