🧠 Topic: What is liquidity in crypto, how pools work, who are LPs, and why impermanent loss is not a myth#cryptoland_88

🔹 Liquidity is the ability to quickly buy or sell an asset at a fair price, without significant market movement.
In crypto, it is especially important: low liquidity = high risk of slippage and volatility.

🏊 Liquidity Pools
In DeFi, pools with token pairs operate instead of orders.
Example: $ETH /USDT. Users add equal amounts in both currencies.

📌 Such a user is called an LP - Liquidity Provider.

They receive:
💸 Fees from all trades
🌾 Farming bonuses
🪙 LP tokens - they can be used in other protocols

⚠️ #Impermanent #loss - impermanent loss

📉 Occurs if the price of one of the tokens in the pool has changed significantly.
As a result:
→ You have less of the expensive token and more of the cheap one
→ In total, you earned less than if you had just held those tokens (#HODL )

Example:
📍 $ETH was $2,000 → became $4,000
You are an LP in ETH/USDT
🪙 When exiting the pool: you have less ETH, more USDT
→ The total amount increased, but less than if simply HODLing

📌 How to reduce LP risks:

🔹 Choose pairs with stable prices (for example, stablecoins)
🔹 Monitor pool metrics
🔹 Use IL calculators (for example, APY.vision, DeFiLlama)

📚 Conclusion:
Being an LP is not just a way to earn on fees, but a strategy with potential risks.
Impermanent loss is a real and important factor to understand.

📖 In the next issue, I will tell you:@Cryptoland_88
How to choose DeFi pools, what to look for in analytics, and where to find safe yield without traps.

👆 This article is for informational purposes only and does not constitute investment advice. Thank you for subscriptions, likes, and comments!