Lesson 4 - Why Your Results Drift From What You Expected

The room felt suspended - as if even the air waited for the next truth to surface.
Tao sat forward, elbows on the desk, eyes fixed on the silent chart.
The two curves no longer looked like price movements.
They looked like two destinies stepping out of sync.

Ava watched him for a moment before speaking.

“Now that you understand divergence,” she said, “you’re ready to see the shadow it casts. Impermanent loss doesn’t appear out of nowhere. It isn’t an error or a glitch. It is the inevitable echo of symmetry inside a world that refuses to stay symmetrical.”

Tao’s breath caught - a small, instinctive reaction to a truth approaching.

“Show me the shadow,” he murmured.

Ava nodded and turned the notebook toward him.
No formulas this time.
Only a simple diagram: two lines diverging, and beneath them, a faint shaded area - the difference between them.

“This shape,” she said, “is impermanent loss.”

Tao studied the drawing.
“It looks so… quiet.”

“That’s because IL doesn’t arrive with alarms,” Ava replied. “It doesn’t shout. It doesn’t warn. It appears softly, in the space between what the pool makes you hold and what you would have held outside it.”

She tapped the shaded region.

“This is the shadow of symmetry. When the market moves one way and the pool forces you to move another, a gap opens. Not a catastrophe - a gap. Impermanent loss is simply the measure of that gap.”

Tao frowned slightly.
“So it’s the difference between two paths. The path of the pool, and the path of the market.”

“Exactly. You entered the pool with a fixed idea of what your tokens were worth. But the moment divergence happens, the pool begins reshaping your position. It sells what is rising. It buys what is falling. Not because it’s wrong - because it must keep balance. But that balance comes with a cost.”

Tao’s voice dropped to a whisper.

“A cost hidden beneath the symmetry.”

“Yes,” Ava said. “The cost is not in losing tokens. It’s in losing what you would have had if the pool didn’t bend to the equation.”

Tao sat back, letting the meaning settle.

“So impermanent loss isn’t loss of value. It’s loss of alignment.”

Ava’s eyes warmed — the quiet recognition of a student stepping across a threshold.

“Correct. When Token A skyrockets, you hold less of it than you would have. When Token B collapses, you hold more of it than you want. Your position drifts away from the market’s logic. That drift is the shadow - subtle, persistent, structural.”

Tao glanced at the shaded diagram again, something clicking deeper than before.

“And the reason it’s called impermanent,” he said slowly, “is because the shadow disappears if the divergence closes - if the market returns to the old ratio.”

Ava nodded.

“Exactly. If the world returns to balance, the pool returns you to symmetry. The shadow dissolves. But markets rarely retrace perfectly. And so, for most providers, the shadow becomes permanent — not because the loss itself is irreversible, but because the divergence never truly closes.”

Tao exhaled, a long, steady breath.

“So impermanent loss is born not in chaos, but in order. The order of the pool pressing against the disorder of the market.”

Ava closed the notebook softly.

“And that,” she said, “is the truth people miss. Impermanent loss is the price of enabling liquidity. It is the quiet toll you pay for making a market smoother for others. Not a punishment - a structural consequence. And once you see the shadow clearly, you can understand why some pairs suffer more, some less, and why yield exists at all.”

Tao looked at the chart again, and for the first time, he didn’t see loss.
He saw a system doing exactly what it was built to do.

“What comes next?” he asked.

Ava opened to a new page - the heading precise, almost surgical.

The light in the room shifted. The diagram between them dimmed, but the shadow it revealed did not. Tao stared at it - the quiet space where value slipped into misalignment.

“I see the shadow,” he said. “But I don’t yet see what it means for someone inside it.”

Ava closed the notebook with a soft snap.

“You will,” she said. “Because the shadow only becomes real when the market moves. And that’s where we’re going next.”

She turned to the screen, where BTC and ETH pulsed in the dark like distant signals.

“Part 1 of the course you the structure,” Ava said.
“Now watch what happens when the world pushes against it.”