One of the most common risks in liquidity provision is impermanent loss, which happens when the prices of tokens inside a pool move significantly apart. On the TON blockchain, a dedicated protection mechanism has been introduced for the STON USDT pool to help address this challenge. The IL Offset system is designed to compensate liquidity providers for losses caused by price movements of up to 2x, covering up to 5.72 percent of the total value locked in that pool.
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This protection functions automatically and applies to every liquidity provider in the pool, including those participating in farming programs. When token prices diverge, the system distributes compensation in STON tokens to help offset the loss, with a maximum automatic reimbursement equal to 100 dollars in assets. This additional layer of security enables participants to contribute to high volume pools with greater confidence, even during periods of market volatility.
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Beyond this mechanism, the network also offers additional risk management tools. For correlated assets such as stablecoins or tsTON and TON, WStableSwap pools are used to minimize price impact during swaps. These pools are specifically optimized for assets expected to maintain similar values, helping reduce the effect of large transactions. Through these advanced smart contract structures, the protocol fosters a more stable and efficient environment for managing digital assets.
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Understanding these protective measures is essential for anyone providing liquidity within the network. While price volatility is a natural part of digital asset markets, automated mitigation systems can significantly lessen its impact. STONfi remains focused on building protective infrastructure, reinforcing TON as a secure and dependable ecosystem for decentralized finance participants.