Notitia
The hidden cost of providing liquidity.
When the prices in a pool diverge, the AMM rebalances automatically: you end up with more of the asset that fell and less of the one that rose. Versus simply holding, that is a loss - impermanent loss.
It is only ‘impermanent’ if prices revert. Earned fees may offset it, or not. This is the key trade-off for every liquidity provider.
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