Swap impermanent loss

In the simplest terms, impermanent loss occurs when you deposit assets into a pool and suffer a loss when you withdraw them at a later date compared to just holding these assets throughout this period. As such, you don’t actually have to lose money for impermanent loss to occur .

An important starting point for the in-depth studies was the realization that the risk of impermanent loss can be reduced by minimizing divergence in tokens pair prices . If prices between tokens remain constant for AMM, liquidity providers can trade with less fear of losing their funds.