Stablecoin pairs reduce liquidity provider losses to under 0.1%
Liquidity providers in stablecoin pairs retain more deposited value than those in volatile pairs. In volatile pairs, impermanent loss often outpaces fee earnings, causing 54.7% of Uniswap V3 LPs to lose money according to a 2025 study. Stablecoin pairs like USDC/USDT rarely deviate more than 2% from parity. This keeps impermanent loss under 0.1% in most conditions. The result is driven by the stablecoin peg to the U.S. dollar, which eliminates the price swings that make volatile assets unreliable in liquidity systems.
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