September 9, 2021, 5:36AM EDT
• 7 min read
Is passive market making profitable?
- Passive liquidity providers earn trading fees but suffer from impermanent loss when the price ratio of their pooled assets change
- SushiSwap pairs typically had lower volume-to-liquidity ratios than their Uniswap counterparts, resulting in lower returns for SushiSwap liquidity providers
- Providing liquidity to stablecoin pairs could generate more than a 10% annual yield