What Is Impermanent Loss and Is It Related to a Rug Pull?

Impermanent loss occurs when the price of deposited assets changes compared to when they were deposited in a liquidity pool. It is a normal risk for liquidity providers, not a scam itself.

While not directly a rug pull, the sudden and massive price change caused by a rug pull can result in an extreme form of impermanent loss for the remaining liquidity providers. However, a rug pull is an intentional theft, whereas impermanent loss is a market-driven risk.