Futureswap LPs are not exposed to impermanent loss under normal circumstances. The liquidity pool has a combination of two tokens. These tokens are whatever the exchange is denominated in. An ETH/USDC exchange will need equal value amounts of ETH and USDC deposited. Due to price movements of the underlying assets, the internal liquidity pool may become unbalanced. An example would be if ETH appreciated by +50%, then there would be more ETH value in the Futureswap liquidity pool than there would be USDC.
Equal value amounts must be deposited into a Futureswap pool, but this does not mean that you will keep that same ratio of tokens. If the Futureswap pool is imbalanced at the time of your deposit, your ratio will change to reflect that of the liquidity pool's after your deposit.
Impermanent loss can occur for Futureswap LPs when a trader loses all of their collateral and becomes bankrupt. This can occur for several reasons, but the root cause is that the trade was not liquidated at an acceptable price. Some causes could be an oracle outage (such as Chainlink going down), the base blockchain pausing, Arbitrum pausing or breaking, etc.
In this scenario, LPs will effectively take over the exposure of the underlying. If the trader was long, the LP will now hold more asset and less stable than they did before the trader became insolvent.
All smart contracts carry risk with them. The Futureswap protocol takes security very seriously and has implemented robust testing, code reviews, internal audits, external audits, fuzzing, and static verification. While the Futureswap core devs are very security-minded, users should not deposit funds that they cannot lose.
There can be many more unknown risks that are not identified here.