> For the complete documentation index, see [llms.txt](https://hawkfi.gitbook.io/whitepaper/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://hawkfi.gitbook.io/whitepaper/~/revisions/T1wAxuMPtKyDiqcfhDyl/how-to-reduce-il.md).
# How to reduce IL
High Frequency LP gives turbo fee-generation, but there is always Impermanent Loss (IL), and there is no avoiding it in liquidity providing. The goal is to OUTPRINT IL, while mitigating IL. Here’s how:
1. **Wider LP ranges**
* High Frequency Liquidity prints hard from tight real-time rebalancing LPs. You can mitigate IL by setting slightly wider ranges. Tradeoff is less concentrated (but possibly more sustainable) fee generation.
* :bulb:Alpha: Set LP widths based on expected volatility of token
* :bulb:Alpha: Slow weekends with muted price action are great for HFL
2. **Slower auto-rebalances**
* 0 minute real-time rebalances maximize in-range fee generation, especially for high vol pools. But sometimes you can set 5-15 minute rebalances instead to avoid adverse IL from extreme pumps/dumps
Tradeoff is less in-range (but possibly more sustainable) fee generation
3. **Directional auto-rebalances**
* Set HawkFi to rebalance when token price goes up-only, instead of up & down. Rebalances amplify positive IL upwards, and negative IL downwards.
* Tradeoff is significantly less fee generation, but up-only rebalances are suitable for steady long-term fee generation of high-conviction tokens
4. **Strict Entries & Exits**
* Only enter LPs when A) Token price trades sideways/upwards, and B) Volume is high
* Avoid & immediately exit when A) Token price dumps, or B) Volume dries up
5. Set Stop Loss at lower bounds of LP price range
