A loss that liquidity providers on decentralized exchanges incur due to changes in the price ratio of assets in a trading pair. When a user deposits two tokens into a liquidity pool, the algorithm continuously rebalances their proportions. If one asset's price moves significantly, the user will receive a different ratio of tokens upon withdrawal, potentially ending up with less value than if they had simply held both tokens in their wallet. The loss is called impermanent because it disappears if prices return to their original ratio. However, if the user withdraws before that happens, the loss becomes realized.