In What Scenarios Is Impermanent Loss Actually Realized as a Permanent Loss? ⎊ Path

In What Scenarios Is Impermanent Loss Actually Realized as a Permanent Loss?

Impermanent loss becomes a permanent, realized loss the moment the liquidity provider withdraws their tokens from the pool. If the price ratio of the deposited tokens has changed and the LP withdraws, the value difference compared to the initial deposit (HODL value) is locked in.

The loss is also permanent if one of the tokens in the pair suffers a catastrophic failure, such as a hack or a stablecoin de-pegging to zero. As long as the assets remain in the pool, the loss is only "impermanent" because the price ratio could theoretically return to the original deposit ratio.

What Is the Concept of “Impermanent Loss Insurance” and How Does It Function as a Hedging Tool?

Is Impermanent Loss Ever Realized, and If So, When?

Why Is the Loss Considered “Impermanent” before Withdrawal?

What Is Impermanent Loss in the Context of Providing Liquidity to a Derivatives DEX?

Does the Realization of a Gain/loss on a Future Depend on the Withdrawal of Funds from the Exchange?

What Is ‘Impermanent Loss’ in the Context of a Fungible Token Liquidity Pool?

Does Impermanent Loss Become Permanent upon Withdrawal from the Liquidity Pool?

In What Scenario Is Impermanent Loss Actually Realized as a Permanent Loss for the Liquidity Provider?