Impermanent Loss
Impermanent Loss (IL) is the temporary loss a liquidity provider (LP) may experience on Uniswap when the price ratio between the tokens in a liquidity pool changes. It is a mathematical characteristic of Uniswap V2 AMM pools, not a bug. The greater the price movement from the entry point, the higher the impermanent loss. This can be partially offset by trading fees earned from the pool.
Impermanent Loss (IL) is the temporary loss a liquidity provider (LP) may experience on Uniswap when the price ratio between the tokens in a liquidity pool changes. It is a mathematical characteristic of Uniswap V2 AMM pools, not a bug. The greater the price movement from the entry point, the higher the impermanent loss. This can be partially offset by trading fees earned from the pool.