Degen

what's the easiest way to deploy liquidity on base in univ3 in a way that minimizes risk of impermanent loss?

@base builder #001; onchain cities w/ OAK & city3

You will suffer IL; avoiding it is not a thing. (No matter the AMM gymnastics.)

For a volatile asset that you expect to go up, the IL is how much you are willing to pay to 'support the cause', and you are paying it by selling your tokens progressively as the price rises. For a volatile asset that you expect to go down, well don't LP that.

Said another way, LP is to AMM as traditional market making is to order books, and TMM is a sophisticated business.

What is 'automated' in AMM-LP of volatile assets is the syphoning of money from naive to sophisticated participants.

That reality has been obscured only by the printing of money in the form of speculative protocol tokens distributed to LPs.

Said yet another way, narrow liquidity windows, a la v3, are just buy/sell orders. And wide liquidity windows are just (roughly speaking) integrals of narrow liquidity windows. So even a wide v3 liquidity position is just a progressive buy/sell order.

On a volatile asset, that is fundamentally a trading strategy, not a market making strategy. On paper, it isn't a crazy strategy if you have certain highly specific beliefs about the price trajectory of the asset. But in practice, it's not a good strategy.

tldr TINFA or is it: just LP stables or hold assets. Except, for the cause.

The impermanent will become permanent if the price ratio doesn't return to your entry price before you exit (and the price leaving your liquidity window is you exiting).