> For the complete documentation index, see [llms.txt](https://squaredlabs-io.gitbook.io/squaredlabs.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://squaredlabs-io.gitbook.io/squaredlabs.io/features-of-power-derivatives/6.-no-impermanent-loss-for-lps.md).

# 6. No Impermanent Loss for LPs

Simple pools and composite pools help Liquidity Providers avoid impermanent loss (the loss associated with providing liquidity). 

LPs are required to deposit only a single asset in the LP pool instead of a pair of assets, which helps LPs allocate capital efficiently while avoiding impermanent loss.