The automated market maker is among the nice improvements of defi, however impermanent loss can be one of many hindrances that hinder its continued improvement. The answer of impermanent loss might be one of many essential instructions of defi 2.0. Lately, the writer noticed a view that multi-token in a single pool can scale back the chance of impermanent loss. Is it true? I’ve a adverse perspective in direction of this. Quite the opposite, I feel that multi-tokens in a single pool not solely improve the chance of impermanent losses but in addition improve the chance of value publicity. For instance, 16 tokens represent one pool corresponding to balancer, and a couple of tokens pairs type 8 liquidity swimming pools corresponding to uniswap. Assuming that the 16 tokens embrace a shit coin corresponding to luna or UST. As for the primary protocal, 15 tokens within the one liquidity pool might be bought by the AMM protocol. Ultimately, all liquidity suppliers’ property might be reset to zero. However as for the second protocol, 16 tokens scattered in 8 completely different liquidity swimming pools, just one liquidity pool together with luna will undergo losses, whereas the opposite 7 swimming pools is not going to be affected. Based mostly on the above standpoint, the multi-token liquidity pool mannequin enormously aggravates the market threat, whereas the dual-token pool separates the market threat very nicely. In fact, the one with the bottom threat is the single-sided staking mannequin, which can be one of many instructions of our efforts sooner or later.