Impermanent loss (IL) occurs as the number of tokens in liquidity pools changes during volatile markets. Let's assume that there's a liquidity pool for tokenA-tokenB. If the price of tokenA increases relative to tokenB, the quantity of tokenA within the liquidity pool will decrease while the quantity of tokenB increases. If you decide to redeem your assets in the liquidity pool by returning your LP tokens, you will receive less tokenA and more tokenB than your initial deposit. Comparing that to holding both tokens in your regular wallet, there's a slight loss. The greater the change in price, the bigger IL you will be exposed to. Although IL is somewhat mitigated by trading fees that you receive for holding LP tokens, you should be aware of potential losses you may suffer.