1/ Hey everyone! 💸 If you're into DeFi and providing liquidity in AMMs, you’re probably familiar with the struggle of impermanent loss. Today, I’m going to show you how to hedge your AMM position with strategic trades, so you can protect your profits and manage risks like a pro! 👇

3/ 🔄 Using Perpetual Contracts for Hedging One effective way to hedge is by using perpetual contracts. On platforms like @nftperp, you can short the assets you're providing liquidity for, which helps protect you from price drops while you continue earning those LP fees. 💰

4/ 📉 Example Scenario Imagine you’re in an ETH/USDT pool, and you’re concerned about ETH’s price falling. You can short ETH on NFTperp to hedge your position. If ETH’s price drops, your short position gains value, offsetting the losses in your AMM position. It’s like having a built-in safety net! 🕸

5/ ⚖️ Adjust Your Hedge Ratio Your hedge doesn’t need to be all or nothing. You can adjust the ratio based on your risk tolerance. A partial hedge allows you to benefit from upward price movements while still protecting against significant losses. Finding the right balance is key! 🎯

6/ 📊 Dynamic Hedging for the Win Markets are constantly changing, and so should your hedging strategy. Dynamic hedging involves adjusting your positions as prices and market conditions shift. This approach keeps you flexible and better protected in volatile markets. 🚀

7/ 💸 Don’t Forget the Costs Hedging isn’t without its costs. You’ll need to consider trading fees, funding rates, and potential slippage. Always weigh these costs against the protection offered by the hedge to ensure it’s worth it. Every cent counts! 💡

2/ 💡 Why Hedge Your AMM Position? While providing liquidity in AMMs can be lucrative, it comes with risks, especially during price fluctuations. Hedging allows you to offset potential losses by balancing your exposure to market movements. It’s like getting insurance for your trades! 🔒

Hey! How you actually hedging? Short-positions? But short-position just gain losses in long term