# What Is Impermanent Loss Impermanent Loss is the difference between the value between just holding the tokens (HODL value) in your wallet and withdrawing your liquidity and receiving the tokens back. This is a potential risk for users who intend to become Liquidity Providers (LP). Similar to other exchanges, Ferro Protocol provides transaction fees and farming rewards as the mitigation of Impermanent Loss and compensation for the risk experienced by Liquidity Providers. If you want to learn more: * Check out this in-depth [article](https://medium.com/coinmonks/understanding-impermanent-loss-9ac6795e5baa) on Impermanent Loss * Read up on the [Hybrid Invariant Model](/essentials/whitepaper/key-functionalities.md) adopted by Ferro for trading --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.ferroprotocol.com/fundamentals/what-is-impermanent-loss.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.