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NFT Term

Impermanent Loss

Definition of Impermanent Loss from the NFTguild.com glossary.

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Impermanent loss refers to a loss in the value of assets locked up in a liquidity pool. You can calculate impermanent loss by comparing the value of the tokens stored and locked in the liquidity contract versus the current market value of the tokens. One way to mitigate impermanent loss is to invest in liquidity pools that use stablecoins since they have almost no price fluctuations.