Recently, I’ve seen someone describe AMM market making as “leave it there and just collect fees.” Plainly put, the curve is right there: once the price moves off course, your position will automatically shift toward the side that loses. Impermanent loss isn’t some mystical thing—it’s built into the mechanism. Whether the fees can offset it depends entirely on volatility and trading volume. And when luck doesn’t really favor you, it can look pretty bad.

A colleague asked me a couple of days ago, “Why does my account go down even though I earned fees in the pool?” All I could say was: you’re actually selling the assets that are rising fast and buying the ones that are dropping a lot… that’s passive rebalancing.

Now I can also understand the complaints about that “income stacking” approach involving reinvestment/real staking and shared security—the “stacked earnings” come as copycat matryoshka dolls. When the underlying cash flow isn’t thick enough, stacking more just starts to look like exchanging volatility for ticket-like yield. In any case, I only market make with small positions and pick pools where the volatility isn’t too extreme—don’t treat it as a sit-and-collect scheme.