Guide 05
Impermanent loss on Quai liquidity pools
An LP position is not a fixed quantity of each deposited token. Automated market making continually changes the asset mix as traders use the pool.
Inspect my positionsThe asset mix changes
When the relative market price moves, arbitrage trades change the quantities of each asset held by the pool. Your LP tokens continue to represent the same percentage of the pool, not the original token amounts.
Compare with holding
Impermanent loss compares the LP position with simply holding the original assets over the same period. It is separate from the dollar-price movement of the assets themselves.
Measure the full result
A useful LP return breakdown combines token price changes, changing pool composition, trading fees, incentives, deposits, withdrawals, and gas costs. Current underlying balances explain exposure but do not by themselves reconstruct historical performance.