Impermanent Loss Calculator
Estimate the impermanent loss a liquidity provider suffers when one asset’s price moves relative to its pair, versus simply holding the two tokens.
How it works
r = 1 + price change ÷ 100 · Value ratio = 2 × √r ÷ (1 + r) · Impermanent loss = |value ratio − 1| × 100 (the shortfall of the pool versus holding)
Impermanent loss is the gap between the value of assets left in a constant-product liquidity pool and the value they would have had if you had simply held them. When one token’s price diverges from the other, the pool’s automatic rebalancing sells the rising asset and buys the falling one, so you end up with relatively less of the winner. The loss is called "impermanent" because it disappears if prices return to where you started — but it becomes real the moment you withdraw at a divergent price. It is symmetric: a rise or an equivalent fall in the price ratio produces the same shortfall, and larger moves make it grow.
Worked example
If one asset rises 50% against its pair, r = 1 + 0.50 = 1.5. Value ratio = 2 × √1.5 ÷ (1 + 1.5) = 2 × 1.2247 ÷ 2.5 = 0.9798, so the position is worth 97.98% of just holding — an impermanent loss of about 2.02%. Fees earned by the pool are what a provider hopes will more than offset this.
Frequently asked questions
What is impermanent loss?
It is the opportunity cost of providing liquidity to an automated market maker rather than holding the tokens. When the two assets’ relative price changes, the pool rebalances against you, leaving your withdrawn value below what holding would have produced. It becomes permanent only when you exit the pool.
Why is a gain and an equal loss treated the same?
The constant-product formula depends only on the ratio of the two prices, and the value ratio 2√r ÷ (1 + r) is symmetric around r = 1. So a token doubling relative to its pair and a token halving relative to its pair produce the same percentage impermanent loss.
Does impermanent loss mean I always lose money?
No. It only measures the shortfall versus holding — you can still be up in dollar terms. Liquidity providers earn trading fees, and if those fees exceed the impermanent loss the position beats simply holding. This tool shows the loss side only, before fees.
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Educational estimate, not investment, tax or financial advice. Returns are never guaranteed and past performance does not predict the future. Confirm figures with a licensed advisor.