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

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  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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