Impermanent Loss, the discrepancy between the payoff of liquidity provision versus buy and hold, is sometimes referred to as the ’silent killer’ in Decentralized Finance. We describe how Impermanent Loss can be hedged in a Constant Function Market, both statically as well as dynamically. If...

We consider Geometric Mean Market Makers – a special type of Decentralized Exchange – with two types of users: liquidity takers and arbitrageurs. Liquidity takers trade at prices that can create arbitrage opportunities, while arbitrageurs align the exchange’s price with the external market...