Decentralized Financing

In crypto, anyone who wants to be a market maker in a pair of tokens can contribute that pair to a liquidity pool. In an AMM liquidity pool, if the price of one token keeps going up against the other token, the pool will have more and more of the token worth less and less. This is a risk that all market makers take; it's sometimes called adverse selection. I don't know why, but I love it. It delights in the name impermanent loss.