Editorial

Impermanent Loss: What it Is and How to Avoid It

Impermanent Loss: What it Is and How to Avoid It

Impermanent Loss (which should be called permanent loss) is the money that you lose when you provide liquidity to a service like Uniswap. To be clear, it is not the money you lose for using Uniswap to trade tokens (that’s a service fee), but the money you lose if you provide liquidity on the back end (i.e., if you make the trades possible).