@CryptoSorted 27 September 2021 more from that month

On Impermanent Loss (IL)... As long as the price of the tokens you deposit into a liquidity pool does NOT remain exactly the same as when you deposited them, you're going to suffer from impermanent loss. Yes, the price of one or even both tokens could rise significantly over time, but that also wouldn't stop you from incuring IL, except they both grow at the same rate from the time you deposited them into the pool (very unrealistic expectation). However, the extent of the IL you suffer depends entirely on how much either of the tokens has grown in proportion to the other. The greater the difference in their prices relative to when you deposited them into the pool, the greater the IL and vice versa. It just means that you would have made more money putting all the funds in the single coin that appreciated the highest than providing liquidity. A reversal of this is when the fees generated in the pool is high enough to offset the impermanent loss (but usually this is not the case). #cryptocurrency #crypto