Frequently Asked Questions
Find answers to the most common questions about Compass Protocol, and how you can benefit from our protocol.
Impermanent loss occurs when the value of your staked assets in a liquidity pool diverges from simply holding them due to price changes. This can lead to net losses, even after accounting for trading fees.
Compass Protocol employs advanced AI algorithms to dynamically manage asset allocations within our two-layer structure: 1. Aggregated Staking Assets Layer: Our AI optimizes a pool of popular assets (e.g., BTC, ETH, USDT, MKR) to achieve a state similar to a delta-neutral position; 2. Strategy Virtualization Layer: Users can select any trading pair and risk level. The AI adjusts strategies in real-time, aligning with market conditions to mitigate IL.
Compass Protocol stands out by using advanced AI algorithms and a novel two-layer structure to deliver significantly better performance in mitigating impermanent loss—up to 100 times better than traditional solutions. Our comprehensive approach not only reduces IL but also improves capital efficiency and user profitability.
By using AI to manage and optimize liquidity provision, Compass Protocol reduces the risks associated with impermanent loss and enhances yields. This means you can earn more from your staked assets with less risk compared to traditional liquidity pools.
Security is our top priority. Our protocol will undergo rigorous testing and auditing to ensure the safety of user funds. Additionally, our AI-driven strategies are designed to effectively manage risks in volatile market conditions.
We plan to launch our testnet in Q1 2026. Please sign up and follow our social media channels for the latest updates and opportunities to participate in early testing.
For general inquiries, please email us at aidan@compass-protocol.xyz.