What are the risks that beginners should be aware of when using LP? This applies to all projects providing liquidity to LPs, including Magma Finance. 💠 Impermanent Loss - Commonly referred to as IL or impermanent loss - A loss that occurs when holding tokens is greater than holding them. - This occurs when the pool's rules automatically readjust the allocation of your assets when the price fluctuates. This is very important, so please refer to the comments below. 💠 Unidirectional Trend Risk - If the market moves in one direction, LPs will tend to shift to one asset. - This is especially noticeable in highly volatile coin-to-coin pools. 💠 Rapid APR / Incentive Changes - Farming rewards can be reduced or terminated at any time. - If a specific pool becomes overcrowded, liquidity increases, naturally diluting your rewards. 💠 Smart Contracts / Hacking - Protocol flaws, oracle issues, permission issues, etc. - Beginners should use proven protocols that maintain a stable TVL. - For example, Magma Finance. 💠 Stablecoins / Peg Collapse - Stable Pairs Pools are not safe either. - If one peg collapses, losses are immediately reflected. 💠 Bridge / Chain - Price discrepancies can occur due to bridges moving to other chains or issues within the chain itself. The "impermanent loss" explained at the beginning is crucial because it's essential for calculating the break-even point for LP profits. To be continued