In this post, we present a simple framework for a conservative assessment of IL. We then apply it to current market data and show that IL is very limited for nUSDC and nDAI.
Recursive lending is a very popular strategy in DeFi. It involves lending and borrowing on Compound / AAVE in order to harvest the maximum reward possible. This strategy was very profitable at the beginning of 2021. However, returns have dropped considerably as more money flew into the strategy and the value