Curve Founder Michael Egorov Tackles Impermanent Loss with New DeFi Strategy

• Michael Egorov shares a new DeFi paper on eliminating impermanent loss.
• The proposed strategy uses leverage and rate rebalancing instead of price rebalancing.
• Simulations show up to 20% APR with single-sided exposure and reduced risk.

Curve Finance founder Michael Egorov has introduced a new decentralized finance (DeFi) strategy designed to eliminate impermanent loss, one of the biggest and most persistent challenges for liquidity providers. The proposal was detailed in a new paper published by Yield Basis on the social media platform X, captioning it “Yield Basis is coming.” 

The proposed model uses a novel combination of stable leverage and interest rate balancing, giving liquidity providers the benefits of earning automated market maker (AMM) fees while only being exposed to a single asset, neutralizing the risk of impermanent loss.

Strategy Targets One of DeFi’s Biggest Challenges

Impermanent loss occurs when liquidity providers earn less than they would by holding their tokens. It results from price divergence between the two asse…

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