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# MM Risks
## What **risks do market makers face in their work?**
Market makers sometimes face the risk of impermanent losses or profits. This means that a market maker's position may be in an unfixed loss for some time. Similarly, a market maker's position may be in unrealised profit. However, this only applies to the managed liquidity portfolio. Commissions continue to be generated on a daily basis, providing a source of net income.
## How **do market makers mitigate the risks of impermanent loss?**
Basically, impermanent losses are not fixed because market makers work in the long term. With proper liquidity management, the position will move to impermanent profit status. However, market makers observe additional risk mitigation measures, especially for ZODIAC liquidity providers. For example, if a liquidity provider's daily profit from commissions exceeds 1%, anything earned above this will be allocated to the impermanent loss fund, which will mitigate risks if necessary. Additionally, if there is an unrealised profit, the position is rebalanced and the profit is also allocated to the impermanent loss protection fund.
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