Impermanent Loss
DeFiUpdated: October 15, 2025
Also known as: IL, Divergence Loss
A temporary loss experienced when providing liquidity in DeFi due to price changes in paired assets
A temporary loss experienced when providing liquidity in DeFi due to price changes in paired assets.
Impermanent loss occurs when the price ratio of tokens in a liquidity pool changes compared to when they were deposited. The loss is "impermanent" because it only becomes permanent if you withdraw your liquidity at an unfavorable price ratio.