@noonishbunnie
Impermanent loss occurs when the value of assets in a liquidity pool changes relative to when they were initially deposited. This typically happens in automated market maker (AMM) systems like Uniswap or Sushiswap. When the price of one or both assets in the pool fluctuates, liquidity providers (LPs) may find that the value of their holdings has decreased compared to simply holding the assets outside the pool. While LPs earn fees for providing liquidity, impermanent loss can offset these gains, and in some cases, lead to a net loss. However, the loss is "impermanent" if the asset prices return to their original state.
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