Impermanent loss
The cost that concentration makes larger, not smaller.
What it is
When you provide liquidity, the pool rebalances your two tokens as the price moves — selling the one that is rising and buying the one that is falling. If the price ends up somewhere other than where it started, you finish holding more of the weaker asset and less of the stronger one than you would have by simply doing nothing.
The difference between what you hold and what holding would have left you is impermanent loss. The name is optimistic: it is only impermanent if the price returns.
Why concentration sharpens it
A narrow range is a leveraged version of the same position. The same capital is doing the work of a much larger position across a much smaller price span, which is why it earns more in fees, and it means the conversion into the losing side happens faster and completes entirely once the price exits your range.
Full-range positions behave gently. Very narrow positions can convert completely in an afternoon and then sit inert holding the wrong token.
Most losses in concentrated liquidity are not exploits or bugs. They are a range set too narrow on a pair that moved, collecting fees for two days and then holding the fallen side of the pair for two months.
What Otter shows about it
Today: nothing beyond this page, which is a gap. Positions opened through Otter have their deposit recorded, which is what makes the direct comparison possible — fees collected against what holding would have produced — and that comparison is a planned phase rather than a shipped one. Until then, treat the fees figure as one half of a subtraction.