← Back to Glossary List

Impermanent Loss

The loss liquidity providers face when the price ratio of deposited tokens changes compared to when they deposited them. It is 'impermanent' only while funds remain in the pool and becomes permanent once withdrawn.

To put it in plain English

Like putting $100 in quarters and $100 in dimes into a shared jar, but when you withdraw them, quarters are now worth more - you'd have been better off just holding the quarters.

Keep Learning! Check out these related lessons

    © fluentDev 2025