Just brewed a cup of tea and went to check the pool depth again, still the same words: The curve of the AMM looks smooth, but it’s actually just hanging you on the volatility. When the price deviates, your position is passively converted to “less gained when rising, more gained when falling.” To put it plainly, impermanent loss is not mysticism; it’s a mechanism written into the system, the bigger the volatility, the more painful it is. Market making is really not about lying back and collecting fees; the fees must first outweigh this deviation to be considered profit.

Recently, everyone keeps comparing RWA, US bond yields, and on-chain yield products, and I can understand the desire to find something “stable,” but many of the yields on-chain are backed by liquidity and volatility buying the orders. It’s not just about slapping on an annualized rate and turning it into a government bond. Anyway, I now pay more attention to the spread, depth, and the probability of mean reversion; if I can’t handle the volatility, I’ll hold back and not reach out. That’s how I’ll do it for now.