Skip to main content
Learn

Does a Flash Crash or a Slow Price Drift Cause Different Impermanent Loss Outcomes?

Total IL depends only on the final price ratio; a flash crash may cause higher realized losses and slippage issues.
Greeks.Live20.11.25

Does a Flash Crash or a Slow Price Drift Cause Different Impermanent Loss Outcomes?

The total magnitude of impermanent loss depends only on the final price ratio divergence, regardless of the path taken (flash crash or slow drift). However, a flash crash can lead to higher realized losses for LPs who panic-withdraw or if the AMM experiences extreme slippage due to sudden, massive trades.

A slow drift allows more time for fees to accrue, potentially offsetting the IL before a withdrawal.

What Is the Concept of “Divergence Loss” in Relation to Impermanent Loss?
Why Is the Loss Considered “Impermanent” before Withdrawal?
How Does a “Flash Crash” Trigger Margin Calls for Put Writers?
Explain the Role of “Stop-Loss Hunting” in Exacerbating a Flash Crash

About

Contact

Editorial Policy

Terms of Service

Privacy Policy

Cookie Policy

© 2025 Greeks.Live

All Rights Reserved

Greeks.Live RFQ

Build by Noo on Engine

Source: The content on this website is produced by Greeks.live's proprietary analysis systems, which utilize advanced Large Language Models (LLMs). This information might not be subject to a full human review before publication and may contain errors.
Responsibility: You should not make any financial decisions based solely on the content presented here. We strongly urge you to conduct your own rigorous due diligence and to consult a qualified, independent financial advisor.
Purpose: All information is intended for informational purposes only. It should not be construed as financial, investment, trading, or any other form of professional advice. News and data are not trading signals.
Risk: The cryptocurrency, derivatives, and options markets are highly volatile and carry significant risk. By using this site, you acknowledge these risks and agree that Greeks.live and its affiliates are not responsible for any financial losses you may incur.