Impermanent Loss Calculator
The loss from providing liquidity vs just holding, as a function of price ratio change — for AMM LPs.
Impermanent loss is the opportunity cost of providing liquidity to a 50/50 AMM pool versus just holding the tokens, caused by the pool rebalancing as prices diverge. It's 'impermanent' because it reverses if prices return to the entry ratio. A 2× divergence = ~5.7% IL; 4× = ~20%. Trading fees must exceed IL for LPing to profit.
Formula
Note: This is a technical utility, not financial advice. Crypto assets are volatile and risky; do your own research and consult a licensed professional before making decisions.
About Impermanent Loss Calculator
Impermanent loss is the most misunderstood risk in DeFi liquidity provision, and this calculator makes it concrete. When you provide liquidity to a 50/50 AMM pool (Uniswap-style), the pool automatically rebalances as the two assets' prices diverge — leaving you worse off than if you'd simply held the tokens. Enter the price-ratio change and it computes the exact percentage loss versus holding, using the constant-product formula IL = 2√k/(1+k) − 1. A 2× divergence costs ~5.7%, a 4× move ~20%. It's the number every liquidity provider must weigh against the trading fees they earn.
How to use Impermanent Loss Calculator
- 1Enter your values into Impermanent Loss Calculator — sensible, domain-typical defaults are pre-filled so you see a real result immediately.
- 2The result recomputes live using the formula shown on the page; there is no button to press.
- 3Adjust any input to compare scenarios, then read the worked example to see the substituted numbers.
Why use Impermanent Loss Calculator?
- ✓Computes Impermanent Loss instantly in your browser — no sign-up, no upload, no server round-trip.
- ✓100% free and unlimited, with the exact formula shown: IL = 2√k / (1 + k) − 1, where k = the price ratio change of the two pooled assets.
- ✓Runs entirely client-side, so every value you enter stays private on your device.
- ✓Live recompute as you type, with a worked example and authoritative references for trust.
Frequently asked questions
What exactly is impermanent loss?+
It's the difference in value between providing liquidity to an AMM pool and simply holding the same two tokens, arising because the pool sells the appreciating asset and buys the depreciating one to keep its balance. If asset prices diverge, you end up with more of the loser and less of the winner than if you'd held — an opportunity cost, not a realized loss until you withdraw.
Why is it called 'impermanent'?+
Because it reverses if the price ratio returns to where you entered — at that point the loss vanishes entirely. It only becomes permanent (realized) when you withdraw liquidity while prices are diverged. In practice prices rarely return exactly, so much IL does get realized, making the 'impermanent' name somewhat optimistic.
How much impermanent loss should I expect?+
It depends on price divergence: a 1.25× move is ~0.6% IL, 2× is ~5.7%, 4× is ~20%, 10× is ~42%. It's symmetric — a 2× rise or a halving both cause the same IL. For stablecoin or pegged pairs that barely diverge, IL is tiny; for volatile uncorrelated assets, it can be severe.
When is providing liquidity still worth it?+
When the trading fees (and any reward incentives) you earn exceed the impermanent loss over your holding period. Pools with high volume relative to their size, or correlated/pegged assets with low divergence, tend to make LPing profitable. This is a risk assessment, not advice — model your expected fees against the IL this tool shows for your assets' likely price range.
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