This morning I was looking for my phone charger, flipped open the drawer, and found a bunch of sticky notes saying “LP don’t touch”—I laughed, but I also felt a bit guilty. As for the AMM curve, put simply, it’s like you’re handing your price changes to the counterparty: if it goes up, you end up passively selling; if it goes down, you end up passively buying. In the end, when you do the math, it’s actually no better than just holding. That’s what “impermanent loss” really is—so no, it’s not just a matter of lying back and collecting fees.

Lately the group has been circulating rumors about stablecoin regulation, reserve audits, and “de-pegging.” I’m annoyed, but I also think: if your LP contains stablecoins, it may look stable, yet it’s actually more easily pulled around by emotions. The moment volatility hits, the curve will shove you straight into an uncomfortable spot.

Anyway, before I do market making now, I make sure to spell out my range and exit conditions clearly—otherwise, having the signature fail later will be even harder to take than this.