One of the most popular ways to earn a yield on DeFi platforms is by providing liquidity and earning a share of the platform associated fees. However, it is important to be aware that there are also risks involved when providing liquidity, including impermanent loss (also known as divergent loss). This happens when you supply a token pair to an AMM pool, and the prices of the underlying tokens diverge significantly from one another, resulting in a loss if you remove your liquidity position at this time.
This happens due to the way that an Automated Market Maker (AMM) functions compared to a traditional order book style exchange. You can learn more about Automated Market Makers here.
We encourage all users to educate themselves about impermanent loss before providing liquidity to an AMM.
Binance Academy has some comprehensive resources available to learn more about impermanent loss here.