🧠 Lesson 18: What You Need to Know About Impermanent Loss 📉🔄

Impermanent loss happens when you provide liquidity to a pool and the prices of your tokens move too far apart. Instead of making gains, you might end up with less than if you just held the tokens in your wallet 👜

❓ Why does this happen?

• 🔄 Tokens in the pool are constantly being swapped, and the balance is kept by an algorithm

• 🚀 If one token's price jumps, the pool auto-sells some to stay balanced

• 📉 You could end up with fewer valuable tokens than if you just held onto them

🛠️ How to reduce the impact?

• 🎁 Farming rewards can help — extra tokens might balance out your losses

• ⚖️ Choose pairs that move similarly in price, like $ETH and WETH

• 📊 Check the pool’s volume and the platform — higher activity and a strong protocol usually mean less risk

🔚 Bottom line:

Impermanent loss isn’t a total loss — it’s a temporary effect that can be managed. Learn how it works and choose your pairs wisely 💪💡

#CryptoTips 🚀 #LiquidityPools 💧 #DeFiEducation 📚 #BinanceHODLerLA 🔒 #BreakoutTradingStrategy 📈 #TrumpTariffs 🇺🇸