Liquidity Mining's Dirty Secret: How to Calculate Whether a DEX Pool Is Actually Paying You or Slowly Draining Your Capital
Thousands of Ethereum liquidity providers collect fee APYs that look impressive on paper while quietly losing ground to impermanent loss. This article breaks down the real math behind LP returns, examines backtested examples across different market conditions, and offers a practical framework for identifying pools where the fees genuinely outpace the hidden cost of holding two assets instead of one.