Impermanent Loss
By CoinGecko | Updated on Aug 12, 2021
Impermanent loss may occur when you provide liquidity to the AMMs. Impermanent loss is similar to measuring your opportunity cost of holding the token within the pools versus holding them in your wallet. Note: the loss is not realized until you remove your tokens from the liquidity pool. The higher the divergence between the value of holding your tokens in the pool and wallet, the higher is the impermanent loss.
Related Terms
Bloodbath
In context of trading, the term bloodbath is commonly used to describe a market which is on a downtrend with many assets suffering from value depreciation.
Merkle Tree
A Merkle tree is also known as a hash tree in cryptography. It is a tree where every lead node is labelled with cryptographic hash of a data block, and every non-leaf node is labelled with the hash of the labels of its child nodes. It is used to verify of data stored within it and transferable in and between computers.
Algorithm
Algorithm is a set of rules to follow to solve a problem or conduct a task.
Full Node
Full Nodes are computers that verify the set of rules that are built into the protocols of a given cryptocurrency.
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