RE: Impermanent Loss: The one topic every crypto website somehow explains incorrectly.

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I think you are confused. You are not wrong, but they are not either.

They never mention that arbitrage is necessary in some way, they just give an example of an arbitrage trader using that pool. They could have used an other example.

hive-167922
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(Edited)

Hm nope I'm not confused at all.

During this process, the profit extracted by arbitrageurs is effectively removed from the pockets of liquidity providers, resulting in impermanent loss.

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It is very clearly implied (and in many cases explicitly stated) time and time again that arbitragers are the ones causing impermanent losses.

No where is dollar cost averaging mentioned.
No where is the idea that your tokens are for sale.
The fundamental concepts are just not there.

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It is very clearly implied (and in many cases explicitly stated) time and time again that arbitragers are the ones causing impermanent losses.

I still don't see that in the example you showed. I mean they say it explicitly, but it is just an example. They definitely could use another example (like someone buying just to hold) to explain the exact same steps.

During this process, the profit extracted by arbitrageurs is effectively removed from the pockets of liquidity providers, resulting in impermanent loss.

This sentence starts with "During this process". They are just showcasing a particular process where an arbitrageur uses a pool.

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profit extracted by arbitrageurs is effectively removed from the pockets of liquidity providers,

This statement is 100% provably false.
In fact it is a nonsense statement.
A total impossibility.

They are just showcasing a particular process where an arbitrageur uses a pool.

uh no...

resulting in impermanent loss.

They are saying this is what causes impermanent loss.
I don't understand how you are interpreting this in their favor.

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In fact it is a nonsense statement.

Yes I agree.

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