This opportunity works well for investors who want exposure to ETH, while mitigating volatility with USD. This portfolio rebalances between ETH and USD as prices fluctuate.
Risks include multiple smart contract risks and potential impermanent loss if the price of ETH fluctuates significantly from the time you entered the pool.
This ETH-USD pool is a concentrated liquidity pool, where liquidity is provided within specific price ranges to maximize trading fees (your yield). However, it carries the risk of impermanent loss (IL), which happens if ETH’s price changes significantly. You’re betting that trading fees will outweigh any IL and that ETH’s price will stay stable within a range.