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Impermanent loss is a significant risk for liquidity providers in the world of decentralized finance (DeFi). This occurs when the value of the assets in a liquidity pool changes relative to when the assets were deposited. Though called impermanent, it can become permanent if the assets are removed from the pool. Understanding this risk is crucial for anyone considering providing liquidity to pools, as it can impact the overall returns and financial health of the provider.
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