How to earn in DeFi without risk of losses on STON.fi

Decentralized finance (DeFi) promises freedom from centralized platforms, passive income, and participation in the future of finance. However, many newcomers hesitate due to the fear of losing money, which can prevent them from confidently stepping into the DeFi space.

What are liquidity pools?

For example, when you want to exchange tokens through a decentralized exchange (DEX), you need someone who holds the tokens you want. On centralized platforms, the exchange itself provides liquidity. However, in DeFi, liquidity is supplied by regular users who deposit their tokens into special smart contracts called liquidity pools.

For instance, the STON/USDT V2 pool consists of two tokens—STON and USDT. Anyone who adds an equal amount of both becomes a liquidity provider (LP) and receives:

A share of the fees from every swap made within the pool
LP tokens, which confirm their share in the pool

What are impermanent losses, and why do they occur?

Impermanent loss is a temporary decrease in the value of your deposit in a liquidity pool compared to simply holding the tokens yourself. This loss is called impermanent because it may be offset if token prices change favorably, especially when taking fee earnings into account.

To minimize risks, STON.fi offers compensation that covers part of these losses, ensuring more stable earnings for liquidity providers.

Why do impermanent losses happen?

Token price changes
If one of the two tokens in a pool increases significantly in price, the balance within the pool automatically adjusts.
For example, if you provided liquidity for STON and USDT, but STON suddenly rises in price, you might end up with fewer STON and more USDT.
Automatic redistribution
Liquidity pools operate based on a formula that regulates the token ratio to maintain balance.
If the market shifts drastically, your profit might be lower compared to simply holding the tokens outside the pool.

How can you lose money in liquidity pools?

You can end up with losses in liquidity pools if you don’t consider key risks:

Low trading volume
If the pool doesn’t generate enough revenue from swap fees, the funds deposited may not grow.
Insufficient liquidity in the pool
If you deposit liquidity into an unpopular pool with low trading activity, your capital could get stuck without yielding significant returns. In such cases, liquidity providers may lose time and potential profits they could have earned in a more active pool.

What is STON.fi?

STON.fi is a decentralized exchange on the TON blockchain, designed for simplicity, speed, and security. It allows users to swap tokens, provide liquidity, and earn commissions.

STON.fi is like Uniswap but on TON, with protective features for the community.

How Does Loss Protection Work?

STON.fi has introduced a unique impermanent loss compensation mechanism, reducing financial risks for liquidity providers.

Partial compensation of up to 5.72% of losses per month
Automatic payouts—no need to submit claims
Monthly protection budget: $10,000 in STON tokens
Up to $100 in STON tokens per user per month

The main condition—keep liquidity in the pool and overcome your fear😁.

How to Start Earning?

If you're new to DeFi, here’s a simple step-by-step guide:

Create a TON wallet
The easiest option is Tonkeeper (app or browser extension). Make sure to save your seed phrase—losing it means losing access to your wallet!
Top up your balance
Buy TON through major exchanges (Binance, Bybit, etc.).
Connect to STON.fi
Simply visit STON.fi and connect using your Tonkeeper wallet.
Provide liquidity
Find the STON/USDT V2 pool or follow the link - click, enter the amount of tokens you want to deposit and start earning commission fees.

Conclusion:

STON.fi continues to make DeFi accessible and easy to understand. With impermanent loss protection, it becomes even less risky, giving users the confidence to participate.

Personally, this feature helped me enter a liquidity pool without stress a few months ago. I was genuinely scared of volatility, and it kept me from investing—but thanks to this compensation model, I finally took the leap.

The author's Telegram channel - https://t.me/fomoweb3go