What is impermanent loss? - Crypto Paradise

Impermanent loss (IL) is the potential downside of providing liquidity to decentralized exchanges (DEXs). It’s not a permanent loss, as the name suggests, but a temporary reduction in the value of your assets compared to simply holding them. This happens because you’re providing liquidity in a 50/50 ratio (usually), and if the price of one asset moves significantly relative to the other, your proportional share of the pool will adjust, leaving you with less total value than if you’d HODLed.

Example: Imagine you provide liquidity to a pool with ETH and USDC. If ETH doubles in price against USDC, the pool will rebalance to maintain the 50/50 ratio, meaning you’ll have less ETH and more USDC. While the total *dollar* value of your position might have increased due to ETH’s appreciation, it will likely be *less* than if you had just held the initial ETH and USDC separately. This difference is the impermanent loss.

Important Considerations: IL is only realized when you withdraw your liquidity from the pool. If the prices return to their original ratio at the time you deposit, your IL is completely eliminated. The higher the price divergence between the assets in the pool, the greater the potential for IL. Trading fees earned while providing liquidity can offset or even completely negate IL, making it crucial to consider the trading volume and fees before participating.

In short: IL is a risk inherent in liquidity provision. It’s a function of price volatility and the time your assets are locked in the pool. While potentially substantial, it can be mitigated by choosing low-volatility asset pairs and factoring in the potential for trading fees earned as compensation.

What are the non-permanent losses in a liquidity pool?

Impermanent loss (IL) in liquidity pools is a sneaky beast. It’s the difference between what you’d have earned simply holding your assets versus providing liquidity. The core issue is price volatility. If the ratio of your two tokens changes significantly from when you provided liquidity, you’ll experience IL. Think of it like this: you put in equal value of Token A and Token B. Token A moons, while Token B stays flat. When you withdraw, you’ll receive *less* value than if you’d just HODLed. The math is unforgiving, and IL isn’t a fixed percentage; it’s directly proportional to the price divergence of the assets. The further the prices drift, the greater the loss. Sophisticated strategies like delta-neutral hedging can partially mitigate this, but it adds complexity. The higher the volatility of the pair, the higher the potential for IL. Fees generated from trading in the pool help offset IL, but these fees only become significant with substantial trading volume and a long time horizon. Essentially, you’re betting on trading fees outpacing price fluctuations to make IL worthwhile.

How can one lose money in a liquidity pool?

Losing money in a liquidity pool (LP) is a real risk, even though it’s often presented as a passive income stream. The core problem lies in impermanent loss.

Impermanent loss occurs when the price of the assets you’ve contributed to the pool changes significantly relative to each other. Let’s say you provide equal value of Asset A and Asset B. If the price of Asset A doubles while the price of Asset B remains the same, you’ll experience impermanent loss when you withdraw your assets. This is because you’ll receive a proportionally larger amount of Asset B and a smaller amount of Asset A than you initially deposited, resulting in a lower total value than if you had simply held the assets.

Here’s a simplified breakdown:

You provide liquidity: You deposit equal amounts of Asset A and Asset B into a pool.
Price fluctuation: The price of Asset A increases significantly compared to Asset B.
Withdrawal: When you withdraw, you receive a larger proportion of Asset B and a smaller proportion of Asset A. The total value might be less than if you hadn’t entered the pool at all.

The magnitude of impermanent loss depends on the price movement. Small fluctuations usually result in negligible losses, but substantial price swings can lead to significant losses. It’s crucial to understand that this is a loss *relative* to simply holding the assets. You could still profit from the trading fees generated by the pool, but these fees may not offset the impermanent loss.

Beyond impermanent loss, other risks include:

Smart contract vulnerabilities: Bugs in the pool’s smart contract could lead to loss of funds.
Rug pulls: Deceptive developers can drain the pool’s assets.
Hacking: Pools are targets for hackers.
Market manipulation: Large trades can temporarily distort prices, impacting your LP position.

In short: While liquidity pools offer potential rewards, the risk of impermanent loss, along with other security concerns, should not be underestimated. Thorough research and a careful assessment of your risk tolerance are crucial before participating.

Why are non-recurring losses called that?

Impermanent loss (IL) in decentralized exchanges (DEXs) arises from the price divergence of the asset pair you’ve provided liquidity for. Typically, this involves a volatile cryptocurrency paired with a stablecoin like USDC. The core issue is that when you provide liquidity, you’re essentially creating a market-making position.

How it works: You deposit equal value in two assets (e.g., ETH and USDC). The DEX automatically adjusts the ratio to maintain a 50/50 balance, based on current market prices. If the price of ETH rises significantly relative to USDC, you’ll end up with more USDC and less ETH than you initially deposited. Conversely, a drop in ETH’s price leads to more ETH and less USDC. Your gains will be lower than if you had simply held your original assets.

Why “impermanent”? The loss is termed “impermanent” because it only *becomes* a realized loss when you withdraw your liquidity. Until then, it’s a potential loss, meaning you could still break even or even profit if the price returns to its initial level or moves favorably.

Understanding the risk:

High Volatility, High Risk: The higher the price volatility of the paired assets, the greater the potential for impermanent loss.
Correlation Matters: Positively correlated assets generally result in less IL compared to negatively correlated pairs.
Trading Fees as Mitigation: DEXs typically charge trading fees which are shared with liquidity providers. These fees can offset, and even exceed, impermanent losses, making liquidity provision profitable despite price fluctuations.

Example: Imagine you provide liquidity with 1 ETH (worth $1,000) and 1,000 USDC. If ETH doubles to $2,000, the DEX will rebalance your holdings. You might end up with 0.707 ETH and 1414 USDC (approximately). Your total value is higher, but it would have been higher still if you’d just held the ETH. This difference is the impermanent loss.

In short: Impermanent loss isn’t necessarily a bad thing. It’s a risk inherent in providing liquidity on DEXs, balanced by the potential to earn trading fees. A thorough understanding of price volatility and the dynamics of impermanent loss is crucial before participating in liquidity pools.

What are the differences between Uniswap v2 and Uniswap v3?

Uniswap V2’s 0.30% flat fee, while predictable, is a blunt instrument. It’s a one-size-fits-all approach that ignores the wildly varying volatility of different trading pairs. This means you’re paying the same fee whether you’re swapping a stablecoin or a highly volatile meme coin, leading to potential inefficiencies.

Uniswap V3, however, introduces tiered fees: 0.05%, 0.30%, and 1%. This allows liquidity providers (LPs) to tailor their risk and reward. Lower fees attract more liquidity but expose LPs to higher impermanent loss in volatile pairs. Higher fees provide more protection against impermanent loss but incentivize less liquidity. The choice of fee tier directly impacts the trading volume and therefore the potential for earning fees as an LP.

Furthermore, V3’s concentrated liquidity mechanism is a game changer. Instead of providing liquidity across the entire price range, LPs in V3 can focus their liquidity within specific price ranges. This maximizes capital efficiency and significantly reduces impermanent loss compared to V2, especially crucial for volatile assets. This targeted approach comes at the cost of increased management complexity as LPs must actively monitor and adjust their positions.

In short: V2 is simpler, but less efficient; V3 is complex, but offers superior capital efficiency and fee optimization for both traders and LPs, albeit with a steeper learning curve.

How do I unstake liquidity from a pool?

Locking liquidity pool tokens on Solana involves several steps and considerations beyond a simple interface. First, ensure your Solana wallet (e.g., Phantom, Solflare) is connected to the relevant decentralized exchange (DEX) offering locking functionality. This usually requires approving the DEX contract to access your LP tokens. Select the specific liquidity pool token (LP token) you wish to lock. Be absolutely certain of the correct token; incorrect selection leads to irreversible loss of funds. The lock-up period requires specifying a start and end date. Note that some protocols might enforce minimum lock-up durations. Input the amount of LP tokens to be locked; locking the entire balance is often recommended to maximize benefits (e.g., maximized yield farming rewards), but remember associated gas fees. The “Add Periods” option, if available, allows for a tiered approach, perhaps locking a portion for a shorter term and another for longer. Understand the implications; early unlocking often incurs penalties.

Crucially, verify the smart contract address of the locking mechanism before interaction. Scrutinize the contract code (if accessible) or rely on reputable, audited projects to mitigate smart contract risks. Remember that locked tokens are inaccessible during the defined period. This impacts your ability to participate in trading or other on-chain activities involving these assets. Consider the opportunity cost of locking your liquidity; while potentially earning higher yields, you forgo potential gains from price fluctuations during the lock-up. Finally, always backup your seed phrase or private keys; loss of access to your wallet renders your locked assets irretrievable.

Locking liquidity on Solana is not without risks. Impermanent loss remains a factor, regardless of the lock-up. The value of your assets relative to each other within the liquidity pool can fluctuate during the lock-up period, potentially resulting in lower value upon unlocking compared to simply holding the underlying assets. Carefully evaluate the risks and potential rewards before committing to locking your liquidity.

How do I withdraw from the liquidity pool?

Pulling your liquidity from a pool? Piece of cake, assuming you’re not a complete noob. First, you’ll need to connect your wallet – the same one you used to deposit, naturally. Then, navigate to the Pools page, selecting the correct blockchain from the dropdown. You’ll see your LP token holdings, your share of the pool, and other crucial metrics. Don’t ignore the impermanent loss; it’s a potential sting you need to be aware of before removing your liquidity. Remember, the price of the assets in the pool might have shifted since your initial deposit, meaning you might end up with less than you started with. Finally, hit the “remove” button. But before you do that, you’ll want to factor in any trading fees accrued – that’s your profit, folks, so don’t forget to claim it. Consider gas fees too; they can eat into your profits, especially on congested networks. Timing is key here; strategically removing your liquidity can maximize your returns. Don’t just blindly remove it; consider the market conditions.

One more thing: always double-check the transaction details before confirming. No one wants a costly mistake, especially in DeFi. Good luck, and may the returns be ever in your favor.

Is it possible to earn money from liquidity pools?

Liquidity pools offer a compelling way to generate passive income in the crypto space, but it’s crucial to understand the inherent risks before diving in. The primary advantage is the passive income stream. Liquidity providers (LPs) earn a share of the trading fees generated from each transaction within the pool. This fee is typically a percentage of the traded amount, and the percentage varies depending on the specific pool and the decentralized exchange (DEX) hosting it. The more trading volume a pool attracts, the higher the potential earnings for LPs. However, this is not guaranteed and depends on market conditions.

One significant risk is impermanent loss (IL). Impermanent loss occurs when the price ratio of the two assets in the pool changes significantly compared to when you initially deposited them. If the price of one asset rises substantially while the other falls, you may end up with less value than if you had simply held the assets individually. Sophisticated algorithms and careful asset selection can partially mitigate this risk but cannot eliminate it completely.

Another crucial aspect is smart contract risk. Bugs or vulnerabilities in the smart contract governing the pool could lead to the loss of your assets. Thoroughly researching the reputation and security audits of the DEX and the specific pool is essential before committing funds.

Furthermore, the potential for rug pulls, where developers abandon a project and abscond with user funds, is a real concern. Choosing established and well-audited DEXs and liquidity pools significantly reduces this risk, although it never completely disappears.

Finally, consider the opportunity cost. The assets you lock in a liquidity pool are unavailable for other trading or investment opportunities. The potential rewards from the pool must outweigh the potential gains from other strategies.

In summary, while liquidity pools offer a passive income opportunity, it’s a high-risk, high-reward strategy. Thorough research, diversification, and a deep understanding of the risks are paramount for successfully participating in this aspect of the DeFi ecosystem.

How does the tax authority view cryptocurrency?

Russia’s taxation of cryptocurrency is now codified, with the President signing a law classifying digital currencies as property for tax purposes. This means standard income tax (NDFL) applies.

Key Implications for Individuals:

Capital gains from cryptocurrency transactions are taxed similarly to those from securities.
A 13% rate applies to annual income under ₽2.4 million, rising to 15% for higher earners.

Further Considerations (Not explicitly stated in the initial response, but crucial for developers):

Mining: Tax implications for mining activities likely require careful consideration of expenses related to hardware, electricity, and other operational costs. Profitability calculations will need to factor in these tax liabilities.
Staking: The tax treatment of staking rewards is not yet fully clarified, requiring further analysis to determine whether these are classified as income or capital gains. Ongoing regulatory developments should be monitored closely.
DeFi Activities: Participation in decentralized finance (DeFi) protocols, such as lending and borrowing, raises complex tax questions. The classification of yield farming rewards and trading fees will depend on specific circumstances and ongoing legal interpretations.
Reporting Requirements: Understanding the specifics of reporting cryptocurrency transactions to the tax authorities is paramount. Failure to accurately report gains could result in penalties.
International Implications: For developers involved in cross-border cryptocurrency transactions or projects, the interaction between Russian tax law and international tax treaties needs to be analyzed.

Disclaimer: This information is for general understanding only and not legal or financial advice. Consult with a qualified tax professional for personalized guidance.

How do I withdraw money from Uniswap?

Withdrawing from Uniswap depends on whether you’re withdrawing your initial deposit or trading profits. If it’s your initial deposit (e.g., ETH sent to interact with the DEX), you simply need to send the tokens back to your preferred wallet. This involves using your wallet’s ‘Send’ function, specifying the receiving address (your external wallet) and the amount of tokens.

Withdrawing trading profits (e.g., tokens swapped on Uniswap) is slightly different:

Access your Wallet: Navigate to your connected wallet within the Uniswap interface. This is usually a MetaMask, WalletConnect, or similar extension.
Select the Token: Specify the token you want to withdraw (e.g., ETH, USDC, or any other token held in your Uniswap wallet). Note gas fees will be deducted.
Enter the Withdrawal Address: Input the address of the receiving wallet. Double-check this address for accuracy to avoid irreversible loss of funds.
Specify Amount: Enter the quantity of tokens you wish to withdraw. Be mindful of minimum withdrawal limits, if any.
Review Transaction Details: Carefully examine the transaction details, especially the gas fees, before proceeding. Higher gas fees during network congestion can significantly impact profitability.
Confirm Withdrawal: Confirm the transaction on your wallet to authorize the withdrawal.

Important Considerations:

Gas Fees: Ethereum network gas fees can be substantial, significantly impacting the final amount received. Consider monitoring gas prices using tools like GasNow before initiating withdrawals to minimize costs.
Slippage: Large withdrawals might experience slippage, meaning the actual received amount could slightly differ from the initially specified amount.
Security: Always ensure your wallet is secure and that you’re using reputable software. Avoid clicking on suspicious links or providing your seed phrase to anyone.
Network Congestion: During periods of high network activity, transactions might be slower and gas fees higher. Plan accordingly and be patient.

How do I correctly create a liquidity pool?

Creating a liquidity pool on Verse DEX is straightforward, but requires understanding the risks. First, navigate to the Verse DEX Pools page and click “Create Pool.” Connect your MetaMask or WalletConnect wallet. The crucial decision is *token selection*. High volume, established pairs are generally safer, minimizing impermanent loss risk. Consider the correlation between your chosen tokens; highly correlated assets reduce potential profits from price divergence. Conversely, negatively correlated assets might mitigate losses but could also lead to significant impermanent loss if one token drastically outperforms the other. After selecting your pair, you’ll need to approve the transaction using your wallet. Then input the desired amount of each token. Remember that you need an equal value of both tokens based on their current prices. The ratio of your input matters; a 50/50 split minimizes impermanent loss risk, but you can adjust based on your risk tolerance and market outlook. Before confirming, double-check everything – incorrect amounts can lead to substantial losses. The process then involves confirming the transaction on your wallet, which incurs gas fees. Post-confirmation, your liquidity will be added to the pool, generating trading fees based on the pool’s trading volume. Finally, you should regularly monitor your position, understanding impermanent loss is a real possibility. DYOR (Do Your Own Research) before committing significant funds.

Why block liquidity?

Locking liquidity is a big deal, bro. It’s like putting a safety net under the token price. Think of it this way: a locked liquidity pool means fewer tokens are readily available for quick selling, which prevents massive price drops caused by sudden sell-offs – you know, those rug pulls we all hate.

Why is this awesome?

Price Stability: Less volatility means less risk for your investment. It’s much easier to predict (and hopefully profit from!) price movements.
Increased Trust: Locking liquidity shows the project devs are serious and committed. They’re not just trying to pump and dump the token. It signals long-term vision.
Resistance to Market Manipulation: Harder for bad actors to artificially inflate or deflate the price, leading to a fairer market for everyone.

Locking mechanisms like liquidity pools on DEXs (decentralized exchanges) usually involve locking tokens in smart contracts. These contracts automatically prevent access to those tokens for a specific period or until certain conditions are met. The more tokens locked, the better the stability, generally speaking.

Different types of liquidity locks exist, too:

Time-based locks: Tokens are locked for a predetermined period.
Performance-based locks: Tokens are locked until specific metrics are achieved (e.g., total value locked reaches a certain threshold).

Always DYOR (Do Your Own Research), though! Just because liquidity is locked doesn’t automatically mean it’s a guaranteed moon shot. Look at the lock’s duration, the amount locked, and the overall project’s credibility before investing.

How do Uniswap liquidity pools work?

Uniswap’s magic lies in its Automated Market Maker (AMM) system, ditching traditional order books for liquidity pools. Think of it as a giant, decentralized vending machine for crypto.

Liquidity Providers (LPs) are the key. They deposit pairs of tokens (e.g., ETH/USDC) into a pool. In return, they receive LP tokens representing their share of the pool. This is where the fun (and risk) begins.

Earning Fees: Every trade in the pool generates a small fee, typically 0.3%, which is distributed proportionally among LPs. The more LP tokens you hold, the bigger your share of these fees.
Impermanent Loss: This is the crucial risk. If the price ratio of your deposited tokens changes significantly, you might earn less than if you’d simply held those tokens individually. Imagine depositing 1 ETH and 1000 USDC. If ETH doubles in price, your share of the pool will be worth *less* than if you just held the ETH and USDC separately. Conversely, if ETH drops, your share of the pool might be *more* valuable.
Liquidity Provision Strategies: Experienced LPs often employ strategies to mitigate impermanent loss, such as choosing less volatile token pairs or using hedging techniques. Some even use sophisticated bots to manage their positions and optimize profits.

How the pricing works: Uniswap uses a formula (often x*y = k, where x and y are the amounts of the two tokens and k is a constant) to determine the price. As trades occur, the ratio of tokens in the pool changes, directly influencing the price.

In short: Liquidity providing on Uniswap can be highly profitable, but it’s not without risk. Understanding impermanent loss and employing effective strategies is vital for success. DYOR!

How to avoid paying taxes on cryptocurrency?

Paying taxes on cryptocurrency profits in Russia is mandatory for individuals, as outlined in Article 209 of the Tax Code of the Russian Federation (NK RF). You’re required to declare and pay taxes on any income generated from selling your cryptocurrency holdings annually.

Minimizing your tax burden: The key to reducing your tax liability is meticulous record-keeping. The tax authorities will want to see proof of your acquisition costs. This means carefully documenting all transactions.

Track your purchase price: Keep records of the date, amount, and exchange rate for every cryptocurrency purchase. Screenshots of exchange transactions, wallet addresses, and transaction IDs are all crucial evidence.
Document trading fees: Remember to include any fees paid to exchanges or other platforms when buying or selling crypto. These fees are considered part of your acquisition cost.
Consider using accounting software: Specialized crypto accounting software can significantly simplify the process of tracking your transactions and generating the necessary reports for tax filings.

Tax Implications of Different Crypto Activities:

Trading: Profits from buying and selling cryptocurrency are taxable events.
Staking and Mining: Rewards earned from staking or mining cryptocurrency are also considered taxable income.
Airdrops and Forks: Receiving cryptocurrency through airdrops or hard forks generally triggers a taxable event upon disposal.

Failure to comply with tax laws can result in significant penalties, including fines and potential legal repercussions. Accurate record-keeping is essential for minimizing your tax liability and staying compliant with Russian tax regulations.

Why is cryptocurrency banned in Russia?

Russia doesn’t outright *ban* cryptocurrency; instead, the Digital Financial Assets Act of 2025 legally defines cryptocurrencies as digital financial assets. This effectively prohibits their use for payments, treating them as a speculative investment asset rather than a medium of exchange. While you can’t buy your groceries with Bitcoin, investing in crypto is still possible, albeit within a regulated framework. This legal framework aims to control the risks associated with crypto volatility and potential money laundering. Importantly, this legal definition doesn’t necessarily mean that crypto exchanges are outlawed; many operate legally under the new regulations, though stringent KYC/AML procedures are in place.

The implications are that Russian investors can still participate in the cryptocurrency market, albeit with increased regulatory scrutiny. However, the lack of legal tender status significantly limits its usability within the Russian economy. This situation often leads to the use of alternative payment methods, particularly amongst those wanting to circumvent the limitations imposed by the government.

Furthermore, while the law doesn’t outright ban mining, its regulatory ambiguity surrounding this activity could lead to future changes and further regulation. Consequently, the Russian crypto landscape is constantly evolving and requires careful attention to stay compliant with ongoing changes in legislation.

How do I withdraw tokens from a liquidity pool?

To withdraw your tokens from a liquidity pool, navigate to your WX Network application and log in. Head over to the “Pools” tab. Locate your specific pool – and remember, always double-check the pool address matches the one you initially deposited into – and select it.

Before initiating the withdrawal, consider these crucial factors:

Impermanent Loss (IL): Understand that withdrawing might result in impermanent loss if the price ratio of your deposited tokens has changed significantly since your initial contribution. Analyze your profit/loss factoring in this potential IL.
Transaction Fees: Be aware of the network fees associated with the withdrawal transaction. These fees can vary depending on network congestion. Check the estimated gas fees before confirming.
Liquidity Provider (LP) Rewards: If your pool offers LP rewards, consider the potential loss of accumulated rewards by withdrawing prematurely. Weigh the benefits of continued staking against the opportunity cost of your capital.

Once you’ve reviewed these points, proceed with the withdrawal process within the application. Note that the process itself might take some time for confirmation across the blockchain. Always monitor the transaction on a block explorer to ensure it completes successfully.

Following withdrawal, immediately secure your tokens in a reputable and secure wallet. Avoid leaving significant funds on exchanges or in easily accessible locations.

Review your transaction history meticulously for confirmation.
Diversify your holdings across different pools and protocols to mitigate risk.

Who owns Uniswap?

Uniswap isn’t owned by anyone in the traditional sense. It’s a decentralized exchange (DEX), meaning it operates without a central authority controlling it. This differs significantly from centralized exchanges like Coinbase or Binance, which are owned and operated by companies. Uniswap leverages a revolutionary trading model called an Automated Market Maker (AMM). Instead of relying on order books matching buyers and sellers, AMMs use liquidity pools—pools of cryptocurrencies locked up by users who earn fees in return for providing liquidity. This automated process allows for 24/7 trading without intermediaries.

The UNI token plays a crucial role. It’s the governance token of the Uniswap protocol. UNI holders have voting rights on proposals affecting the platform’s future development, essentially giving the community control over the direction of Uniswap. This means improvements and upgrades are proposed and voted on by the token holders, creating a truly decentralized governance structure. The distribution of UNI tokens initially involved a large airdrop to early users and liquidity providers, significantly expanding the community participation right from the start. The total supply of UNI is capped, and the ability to vote with UNI enables direct influence over a system with multi-billion dollar trading volume.

Key takeaway: Uniswap’s decentralized nature, facilitated by its AMM model and UNI governance token, distinguishes it from traditional centralized exchanges. The power rests in the hands of its community, making it a compelling example of decentralized finance (DeFi).

How do I sell coins on Uniswap?

Selling UNI (Uniswap’s governance token) isn’t done directly on Uniswap itself; Uniswap is a decentralized exchange (DEX) for trading various cryptocurrencies, not a place to sell UNI for fiat currency (like USD or EUR).

To sell UNI, you need a centralized exchange (CEX) like Kraken. Kraken acts as an intermediary, allowing you to trade UNI for fiat or other cryptocurrencies.

Step 1: Create a Kraken Account. Register for a free account on the Kraken website. This involves providing some personal information.

Step 2: Account Verification (KYC). Kraken requires Know Your Customer (KYC) verification to comply with regulations. This usually means providing identification documents (passport, driver’s license) to prove your identity.

Step 3: Transfer UNI to Kraken. Once verified, you’ll have a Kraken wallet address. You’ll need to transfer your UNI tokens from your personal wallet (like MetaMask) to this Kraken address. Important: Double-check the address before transferring; sending to the wrong address means losing your funds. There will be a network fee (gas fee) associated with this transfer. The fee amount varies depending on the network congestion.

Step 4: Sell UNI on Kraken. After the UNI appears in your Kraken account, navigate to the trading section. Find the UNI/USD (or UNI/EUR, or other pairing) market and place a sell order. You specify the amount of UNI you wish to sell and the price you want to receive per UNI. Kraken will then match your order with a buyer.

Step 5: Withdraw Fiat Currency. After the sale, you’ll receive your funds in fiat currency (USD, EUR, etc.) which you can then withdraw to your linked bank account. There may be fees associated with withdrawals.

Important Note: Cryptocurrency markets are volatile. Prices can fluctuate significantly, so be aware of the risks involved before trading.