@dreamc
Impermanent loss refers to the loss liquidity providers experience when the price of the assets they’ve deposited into a liquidity pool diverges significantly. It occurs because the pool automatically adjusts the ratio of assets in response to market changes. If one asset increases in value more than the other, liquidity providers will end up with a lower amount of the higher-priced asset when they withdraw. To manage impermanent loss, providers can choose more stable asset pairs (like stablecoins) or use platforms that offer compensation or rewards that offset potential losses.
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