How Does the Concept of “Slippage” Differ from “Impermanent Loss” in a Liquidity Pool Context?

Slippage is the difference between the expected price of a trade and the executed price, incurred by the trader at the time of the transaction due to the trade's size impacting the pool's reserves. Impermanent loss, conversely, is the unrealized loss incurred by the liquidity provider (LP) due to the price divergence of the pooled assets compared to simply holding them outside the pool.

Slippage is a trading cost; impermanent loss is a liquidity provision risk.