According to @Tetranode, Arkham’s new thread explains the mechanics of Yield Basis (YB), a mechanism proposed by Curve Finance founder Michael Egorov to address impermanent loss for DeFi liquidity providers. Source: https://twitter.com/Tetranode/status/2007631819672580455; Source: https://x.com/arkham/status/1996678576108605624 Arkham characterizes YB as a prospective solution to impermanent loss and defines impermanent loss as the temporary value drop LPs face from price volatility that can cause missed upside, highlighting its relevance to AMM-based LP returns. Source: https://x.com/arkham/status/1996678576108605624 For traders, the coverage spotlights Curve Finance (CRV) and DeFi LP yield strategies where impermanent loss risk is material, suggesting elevated attention to CRV, Curve TVL, and LP performance metrics as YB details circulate. Source: https://twitter.com/Tetranode/status/2007631819672580455; Source: https://x.com/arkham/status/1996678576108605624

According to @deanmlittle (source: https://twitter.com/deanmlittle/status/1996239094884757952), proprietary AMMs are profitable because their fee mechanics do not match common retail assumptions and professional market makers actively manage exposures instead of passively absorbing impermanent loss or volatility. According to @deanmlittle (source: https://twitter.com/deanmlittle/status/1996239094884757952), trading in this context is not conducted entirely on-chain, indicating professionals use off-chain tools and hedging practices to mitigate IL and volatility rather than accept them as losses. According to @deanmlittle (source: https://twitter.com/deanmlittle/status/1996239094884757952), traders evaluating LP returns should account for prop AMM-specific fee structures and professional risk management, not naive IL models, when assessing DeFi yield and liquidity quality.