What is an impermanent loss in crypto trading?

An impermanent loss in crypto trading is a situation in which a user gives cryptocurrencies to a liquidity pool and the value of the deposited tokens has changed since the time of deposit. The size of the impermanent loss depends on the scale of these changes. The larger the change, the higher the impermanent loss. As a result, when withdrawing funds, the user receives fewer assets in dollars than he deposited. Pools with assets that fluctuate in small ranges are the least susceptible to impermanent losses.