What is impermanent loss and how does it affect my LP?

When market prices shift, the ratio of assets in your LP position changes too. The resulting value of your position can end up lower than if you'd just held the same assets in your wallet.

Swap fees accrued by liquidity providers can partially or fully offset impermanent loss, but that outcome isn't guaranteed and depends on the pool's swap activity.

For the full explanation with examples, read the guide: Impermanent loss.

Was this article helpful?
0

Still have questions? Get in touch

Comments (0)

Please sign in to leave a comment.

Powered by Zendesk