Impermanent Loss
Understand the core concepts of Impermanent Loss and Divergent Loss in LP positions.
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Course Overview
In This Lesson
Understand impermanent/divergent loss, why it happens, and how trading fees offset these losses to create profit.
Understand impermanent/divergent loss
Technical Core
Key Insights
Impermanent loss is normal in LP and should not be feared
Divergent loss is also used instead of Impermanent loss. It means the price diverged from your original entry
Risk Management
Warnings
Impermanent/Divergent Loss is guaranteed, you must overcome losses with fees
Advanced Metrics
Pro Tips
Profit is the amount you've gained from fees and token price appreciation after accounting for any Impermanent loss
Impermanent loss is usually abbreviated as IL
Use dlmmsim.xyz to get a visual understanding of impermanent loss and how using different strategies affects it