This opportunity works well for investors who want exposure to BTC, while mitigating volatility with USD. This portfolio rebalances between BTC and USD as prices fluctuate.
Risks include multiple smart contract risks and potential impermanent loss if the price of BTC fluctuates significantly from the time you entered the pool.
This BTC-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 BTC’s price changes significantly. You’re betting that trading fees will outweigh any IL and that BTC’s price will stay stable within a range.