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Impermanent Loss
Temporary loss of funds experienced by liquidity providers when volatile assets change price compared to when they were deposited.
Pitfall Alert
The Trap: "Farming High APY = Losing Principal"
You see 500% APY and deposit. The coin crashes 50%. You withdraw and realize you have less money than if you just held. High APY is often a trap to offset this loss.
Pro Tip: Never ignore this warning. 40% of beginners lose funds here.