Unified Approach for Hedging Impermanent Loss of Liquidity Provision

This work develops static and dynamic methods to hedge impermanent loss (IL) for liquidity providers on DEXes like Uniswap V2 and V3. It provides unified formulas for calculating IL across different definitions and shows how to perfectly hedge IL using options in liquid markets or model-based approaches when options are unavailable.

Open the full episode

More from Quantitative Finance