A temporary loss of value that can occur when providing liquidity to automated market makers (AMMs) due to price volatility of the paired assets. For example, if you provide 1 ETH and 2000 USDC to a pool, and ETH price doubles, you may end up with fewer ETH tokens when withdrawing due to the automated rebalancing.
Impermanent Loss
DefiA temporary loss of value that can occur when providing liquidity to automated market makers (AMMs) due to price volatility of the paired assets. For example, if you provide 1 E…
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Definition
A temporary loss of value that can occur when providing liquidity to automated market makers (AMMs) due to price volatility of the paired assets. For example, if you provide 1 ETH and 2000 USDC to a pool, and ETH price doubles, you may end up with fewer ETH tokens when withdrawing due to the automated rebalancing.