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Documentation Index

Fetch the complete documentation index at: https://tech.ramses.xyz/llms.txt

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The Goal

Ramses is committed to furthering the space of research and employs reputable scholars to implement sophisticated research-driven solutions.

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Relevant Research

Ramses contributors have published papers that are informative around systems akin to that of Ramses, providing value insights for users and developers alike

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Impermanent loss and loss-vs-rebalancing I: some statistical properties

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Abstract

There are two predominant metrics to assess the performance of automated market makers and their profitability for liquidity providers: ’impermanent loss’ (IL) and ’loss-versus-rebalance’ (LVR). In this short paper we shed light on the statistical aspects of both concepts and show that they are more similar than conventionally appreciated. Our analysis uses the properties of a random walk and some analytical properties of the statistical integral combined with the mechanics of a constant function market maker (CFMM). We consider non-toxic or rather unspecific trading in this paper. Our main finding can be summarized in one sentence: For Brownian motion with a given volatility, IL and LVR have identical expectation values but vastly differing distribution functions.