DeFiNeutralcrypto.news · 16h ago7/10
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What is impermanent loss? Why liquidity providers lose money explained
Impermanent loss represents a critical but frequently misunderstood risk for liquidity providers in decentralized finance, where fee earnings can be offset by losses from price volatility. This hidden cost occurs when the price ratio of paired assets changes, forcing liquidity providers to hold a suboptimal portfolio compared to simply holding the original coins.
