> For the complete documentation index, see [llms.txt](https://docs.extrafi.io/extra_finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.extrafi.io/extra_finance/leverage-farming/impermanent-loss.md).

# Impermanent Loss

**What is Impermanent Loss?**

Impermanent loss can arise when there is a price discrepancy between the two assets a trader holds on a DEX, usually a cryptocurrency and a stablecoin (such as USDC). When the price of the cryptocurrency falls relative to the stablecoin, the trader can experience a loss due to the difference in prices. This is known as Impermanent Loss.

**How it works:** <https://coinmarketcap.com/alexandria/glossary/impermanent-loss>

**Impermanent Loss Calculator:** <https://defiyield.app/advanced-impermanent-loss-calculator>