Forgot to mention that the interest probably doesn't even cove | LibreCharts

Forgot to mention that the interest probably doesn't even cover the fees you incur in gas from executing said transaction (since the high APR is paid out by block & you'll likely be trying to exit your position as soon as the markets tank, which is frequently seeing how often we get whipsawed back & forth).

Is that what they refer to as 'impermanent loss'?

This is covered in Uniswap v3 documentation where they state:

"First, without layer 2 scaling solutions, Ethereum can currently only handle 12-15 transactions/second [this is understated]. On top of that, every interaction with the network to buy/sell orders incurs gas fees. This means that a market maker may not be able to update their orders fast enough to respond to already volatile crypto prices and would potentially pay more in gas fees than the profits they earn from the spread." (source)

Womp-womp.

This is ponzi nestled into a pyramid and it will implode at a certain point. Who knows when.

But if you're curious as to why there are frequent asset dumps in the crypto market DeFi is a huge fucking reason why.