# Impermanent Loss * Impermanent loss occurs when the price of assets in a pool changes. Users risk increased volumes of impermanent loss when the difference between the pool price and market price of a token increases. * Price change that leads to impermanent loss occurs due to the price determination formula, AMM (Automated Market Maker). Due to the nature of AMM, the transaction rate of tokens cannot be automatically adjusted. Therefore, a user must purchase undervalued assets or sell overvalued assets until the price formed in the AMM equals the price of the market. * Losses can sometimes be larger than the sum of the rewards gained from the pool. When the price of the token in the AMM converges with the market value, the loss disappears, hence the name. --- # 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.neopin.io/earn-with-neopin/pool/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.