Impermanent loss
What a liquidity provider loses, compared with simply holding both tokens, when the price of one token in the pool moves.
Impermanent loss in more detail
When the price of one token in the pool rises, the pool automatically sells some of it as traders buy. You end up holding less of the token that went up. Compared with simply holding both tokens, you have lost out. This is called impermanent loss, because it disappears if the price returns to where it started.
All 128 terms · Checked against the lesson's sources on 10 October 2026.
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