#impermanentloss
DeFi liquidity provision loss when token prices diverge from deposit ratio. Example: Deposit 1 ETH + 2000 USDC to 50/50 pool. ETH doubles to $4K. Pool rebalances to 0.707 ETH + 2828 USDC (total $5656). Holding = 1 ETH + 2000 USDC (total $6000). Loss: $344 vs holding. Mitigated by trading fees, but often exceeds fees in volatile pairs. Key DeFi gotcha for beginners.
Sources: Financial market data, cryptocurrency tracking, investment research