Ori | cofounder of @orca_so

Some thoughts on the term “impermanent loss” AMMs make liquidity provision accessible to new and wider audiences, with significantly less sophistication than traditional market makers I made up the word impermanent loss (IL) to help describe to new audiences (NOT professional MMs, quants, math phds) how a passive, path independent LP position will perform based on long term price divergence Or put simply, to describe the fact that a position will perform better (before fees are factored in) the closer the starting price is to the price at the moment you close your position This is just one of many ways to thing about LP position performance For the pros, it also serves some purpose - to signal/describe the path independent nature of AMM positions - most market making strategies are path dependent. But pros that don't like the term also don't need to use it. Finally, "solving" IL is not really a thing, since IL simply describes how a position reacts to price divergence. You can modify a LP position/strategy so it reacts differently to price divergence - but that is simply taking on a different LP position - the less reactive to price divergence, the less liquidity created and fees earned. When projects market "IL protection / reduction" w/o describing what that means, I think it lessens peoples understanding of what is happening, rather than increasing. Anyway, making complex things accessible to new audiences is hard and AMMs have been a massive step in the right direction. AMMs are going to dominate stable (low volatility) and long tail (smaller/newer ) markets forever. I think they also have a good chance of dominating top volatile markets too but thats a story for another day.