Course

DeFi Impermanent Loss Explained

Understand the hidden trade-off behind fees and pools - so liquidity never surprises you.

8lessons
78minutes
8quizzes to pass
300XP
 

What you get out of it.

Impermanent loss isn’t a mistake. It isn’t a penalty. And it isn’t something that only happens when you “do it wrong.” It’s a structural result of how liquidity pools work when markets move.

This course walks you through impermanent loss step by step - not as a formula, but as a system behavior. You’ll see what happens inside a pool when prices change, why your token balance shifts, and how that differs from simply holding assets outside the pool.

By the end, impermanent loss stops feeling mysterious or unfair. It becomes a known trade-off - one you can evaluate calmly.

Skip this course, and liquidity feels unpredictable. Take it, and liquidity becomes a choice you understand.

What You’ll Learn (to understand the trade-off):

What you’re actually entering when you provide liquidity The rule that reshapes your position automatically How divergence creates misalignment over time When impermanent loss is small - and when it grows quickly Why people still choose to provide liquidity, despite the cost ‍

What you gain isn’t avoidance - it’s agency. You understand what you’re trading off, before you trade.

How it runs
  • One lesson at a time. Each one is short, and each one ends in a quiz you have to pass before the next unlocks.
  • Read or listen. Every lesson has an audio version, so it works while your eyes are elsewhere.
  • Your place is kept. Sign in and the course remembers the lesson you stopped on, on any device.

8 lessons, in order.

They run in order, and each one opens when the quiz before it is passed. A dot marks a lesson that ends in a quiz.

What Liquidity Does to Your Tokens

01 Why Liquidity Pools Feel Safe 9min
02 What Providing Liquidity Really Means 10min
03 How AMMs Trade for You 8min
04 When the Market Moves Without You 9min
05 Why LP Returns Drift From Expected 11min

What Changes When Markets Move

06 Holding vs Providing Liquidity 10min
07 When Impermanent Loss Hurts Most 8min
08 Why People Still Provide Liquidity 10min

Signed in, the ones you have finished are ticked and the next one is the one that opens. Signed out, the course starts at the first lesson.

Part of a learning path

Mechanics of DeFi and Passive Yield

This is course 3 of 4 on that route. Finish all 4 and the path pays 450 $KODEX.

See the path