Is passive market making profitable?

Quick Take

• Passive liquidity providers earn trading fees but suffer from impermanent loss when the price ratio of their pooled assets change
• SushiSwap pairs typically had lower volume-to-liquidity ratios than their Uniswap counterparts, resulting in lower returns for SushiSwap liquidity providers
• Providing liquidity to stablecoin pairs could generate more than a 10% annual yield

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