Mean-zero IL Pools

LPs of Integral experiences Mean-zero Impermanent Loss. This means that there would be times when IL would be negative, making it more profitable to put asset into the pool than holding it in your wallet.

In the long run, IL will converge to 0.

This is made possible with Uniswap oracle and trade delay mechanism, which eliminates most of the frontrunning/cross-exchange arbitrageurs.


Although the trade delay is a slightly negative user experience for traders, it is implemented because it is a crucial way to protect LPs.

LPs incur sure losses when sure-profit traders (arbitrageurs, front-running, etc.) are able to trade on certain DEXes. These order flows are toxic.

With Integral's delay mechanism, these toxic traders can't be certain that they will make sure profits anymore, so they will trade somewhere else.

They can't be sure of the profits because they have to wait 30 minutes, and their 30-min price prediction will carry substantial risk (as former top quants, we know for sure that nobody in the world can continually make 30-min predictions with more than 70% certainty). There is a huge risk to price prediction, so their rational choice is go to some other exchanges to execute their near 100% sure-profit trades, instead of taking their, at best, 70% chances with us.

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