Recently, I saw someone arguing that AMM is “just deposit and you get transaction fees.” In plain terms, market making is more like running a little grocery shop: people come and go, and there’s small change coming in, but across the street (the price) suddenly goes on a huge sale. Then the proportions of the inventory you’re holding get automatically swapped around, and when you finally do the inventory check, you find the amount of goods hasn’t decreased—but the portion that’s worth something has gone down a bit. That’s the awkwardness of impermanent loss.

AMM curves look pretty mathematical, but really it’s just “the scarcer something is, the more expensive it gets.” So when the market moves, the pool is forced to chase after the market and rebalance its holdings. Recently, comparing RWA, U.S. Treasury bond yields, and on-chain yield products in the same bracket also feels pretty accurate: on-chain, a lot of yields are essentially compensation for risk, not free money that falls from the sky. When I choose a pool now, I look at whether the trading volume is real and how big the volatility is. Don’t expect to win just by lying down—treat it like you’re actually running your own operation.