> For the complete documentation index, see [llms.txt](https://docs.datadex.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.datadex.com/risks-of-providing-liquidity.md).

# Risks of Providing Liquidity

### The following are some known risks of providing liquidity, this list is by no means exhaustive and we urge users to do their own research.

Impermanent Loss: Occurs when the price of the tokens in your range moves significantly compared to when you deposited them.

* Mitigated by providing liquidity for stable pairs (e.g., USDC/DAI) or using wider ranges.

Inactive Positions: If the market price moves outside your range, you stop earning fees.

* Requires active monitoring and adjustment.