Recently, I saw someone treat AMM liquidity provision as a form of investment, just throwing in funds and waiting for fees. Honestly, it's a bit like lending out an umbrella for rent, and if the umbrella frame breaks in a strong wind, you still have to pay. The curve is quite elegant, but once the price deviates, impermanent loss silently eats back the small profit you made from arbitrage, especially during high volatility. Basically, it's providing buffer for the market with your position.

The collapse points of blockchain games are pretty similar: once inflation kicks in and studios enter the market, token prices spiral downward. The liquidity pools are like buckets with holes, looking lively with high fees, but the water level drops even faster. Anyway, now I look at pools by their volatility and depth first, then their fee rates. The term "passive income"... just hear it and forget it.