Introduction to Impermax Finance

Let’s consider a hypothetical

  • You are a liquidity provider with $1,000 worth of ETH/DAI locked up in Uniswap.
  • It’s currently earning you 25% apy.
  • You believe this yield is going to go up soon, so you leverage your position to $10,000.
  • The yield does indeed increase from 25% to 50% and you now earn $5,000 per year in returns instead of the $500 you might have otherwise. (That’s effectively 500% apy.)

Lending made for LP holders

Impermax is the industry’s first decentralized lending platform designed to let Uniswap liquidity providers use their LP tokens as collateral for loans.

An economic advantage

One key part of the economic design is that Impermax only lets borrowers borrow the same tokens represented by their LP token collateral. For example, if you want to borrow against your ETH/DAI LP tokens, you will only be able to borrow ETH and DAI.

Borrowing tokens with more tokens

But if you already have some ETH and DAI locked in LP tokens, why would you want to borrow more ETH and DAI? To multiply your yield!

Choose your terms

The Impermax app lets you select the amount of leverage you want and shows the range of price changes that would result in your collateral being liquidated. You can choose any risk/reward level you want.

Providing liquidity with no impermanent loss

What about the lender? What’s in it for them? The lender receives a guaranteed interest rate, with loan repayment backed algorithmically. This means the lender can indirectly provide liquidity to Uniswap and earn returns with no risk of impermanent loss. In effect, the risk is shifted to the borrower. This will also be great for Uniswap since there’s now a better way for low-risk users to become liquidity providers.

Widespread economic efficiencies

Uniswap liquidity providers who want to earn with higher risk/reward can borrow, and users who want to earn with lower risk can lend. Impermax shifts risk according to each user’s needs and creates economic efficiencies across Uniswap. Impermax also plans to support other exchanges this year, extending these efficiencies across the AMM industry.

Long demanded, now supplied

Borrowing against LP tokens with leverage is a really unique service that’s sure to have demand. Many in the industry have assumed that LP tokens would be widely accepted as collateral someday, and this new offering makes Impermax truly the tip of the spear.

Learn more



Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Impermax Finance

Impermax Finance

We're developing a DeFi ecosystem that will enable investors to leverage their LP Tokens