Impermanent Loss — LP Position Declined
Your liquidity pool position is worth less than if you just held the tokens.
This guide covers 4 verified steps to resolve "Impermanent Loss — LP Position Declined". Follow each step in order before moving to the next. If the steps below don't resolve your issue, use the community support options at the bottom of this page.
Understand Impermanent Loss (IL)
IL happens when the price ratio of your LP tokens changes. The AMM rebalances constantly, leaving you with more of the cheaper token. It's "impermanent" because if prices return to original ratio, the loss disappears.
Calculate Your IL
Use an IL calculator (e.g., dailydefi.org/tools/impermanent-loss-calculator). Input your entry prices and current prices to see exact IL %.
Compare vs Fees Earned
IL may be offset by trading fees earned. High-volume pools (ETH/USDC) often generate enough fees to outpace IL. Check your fee earnings on the protocol dashboard.
Consider Stable Pairs
For lower IL risk, provide liquidity in stablecoin pairs (USDC/USDT) or correlated pairs (ETH/wstETH). IL is minimal when prices move together.