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What Is ‘Impermanent Loss’ and Is It Related to the Insurance Fund?

IL is the temporary loss in an AMM pool due to price divergence; it is unrelated to the futures exchange insurance fund's purpose.
Greeks.Live23.11.25

What Is ‘Impermanent Loss’ and Is It Related to the Insurance Fund?

Impermanent loss (IL) is the temporary loss of funds experienced by a liquidity provider in an Automated Market Maker (AMM) pool when the price of their deposited assets changes compared to simply holding them. IL is generally not related to the futures exchange insurance fund, as the fund is specific to covering deficits from leveraged trading liquidations, not AMM pool price divergence.

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How Does Impermanent Loss Relate to Providing Liquidity for Derivative Trading on an AMM?

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