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However, liquidity provision also involves risk.
Price changes between the paired tokens can lead to impermanent loss, meaning the value of deposited assets may differ from simply holding them.

A liquidity pool contains two tokens,
for example TON and USDT
.Users, known as liquidity providers (LPs),
deposit equal values of both tokens into the pool. These funds create the liquidity that traders use to swap assets.

How Liquidity Pools on @ston_fi Actually Work
Liquidity pools are the foundation of trading on STONfi Instead of matching buyers and sellers like traditional exchanges,
STONfi uses an automated system where trades happen against pooled assets.

Example:
Assume you provide liquidity to a TON/USDT pool on @ston_fi
You deposit equal values of TON and USDT.
If the price of TON increases significantly, the pool will gradually sell some of your TON for USDT to keep the balance

It occurs when the price of the tokens you deposit into a liquidity pool changes compared to when you first added them
As prices move, the pool automatically rebalances your assets to maintain its ratio.
This can result in a lower value compared to simply holding the tokens in

GM CT
What Is Impermanent Loss? (With a Example
Impermanent loss is one of the most important concepts to understand before providing liquidity on a decentralized exchange like @ston_fi
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