# Blade's Benchmark: No Impermanent Loss

Blade's pools act like a daily rebalancing portfolio composed of roughly 1/3 ETH, 1/3 WBTC, and 1/3 stablecoins (with zero transaction costs for rebalancing). **This rebalancing strategy results in no impermanent loss for LPs.**

### How Blade Stacks Up Against the Benchmark

Blade's benchmark is no impermanent loss. It achieves this through tracking a theoretical costless DRP.

If we look at a sample of Blade's performance from September 11, 2022 through October 10, 2022, we see that it closely tracks the DRP while staying slightly ahead of it--finishing the interval almost 40 basis points ahead.

***Note:** Blade is "Clipper" in the chart below; Clipper was the initial name of Blade*

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  ![Blade Performance Chart](/images/blade/performance-chart.png)
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Blade was within 1 bps of the DRP for more than three-quarters of the days in the period. For those days where Blade and the DRP diverged by more than 1 bps, Blade was in the leading position more than two-thirds of the time (23% vs. 10% of days).

| **Blade LP Daily Performance vs. Benchmark** | **Frequency** |
| -------------------------------------------- | ----------- |
| > 1 basis point worse                        | 10%         |
| 1 basis point worse to 1 basis point better  | 77%         |
| > 1 basis point better                       | 23%         |

The reason for return divergence is that Blade's FMM will make trades continuously with traders over the course of a day, while the theoretical DRP is simulated to costlessly rebalance *once* per day. Despite the divergences, the daily correlation of percent returns to the returns of the DRP was extremely high at ρ = 0.9996.

Blade's close tracking of the DRP is what enables it to hit its no impermanent loss benchmark.