Choosing Low volatility pairs as Base Assets

The more volatile the assets, the more likely the chance of impermanent loss. This means that tokens with a limited price range, such as stablecoins, are less likely to be exposed to IL.

The advantage of stablecoins is that, when paired with more volatile tokens, they have the effect of offsetting the risk of any adverse price movements. This can be taken a step further by deploying assets in low-risk pools of pairings exclusively made up of stablecoins. The stability of these pools renders risk of IL virtually non-existent, allowing for changes in token ratios without much cause for concern.

Source: Trader Joe

Protocol Risk