About the Impermanent Loss Calculator
This impermanent loss calculator shows how a liquidity position in an automated market maker (AMM) such as Uniswap v2, SushiSwap, PancakeSwap or a Balancer weighted pool compares with simply holding the two tokens. Enter your deposit, how much each token’s price has changed since you deposited, and the pool’s fee APY, and it returns the impermanent loss as a percentage and in dollars, plus your position’s value with fees included.
When the prices of the two tokens move apart, the pool’s constant-product formula rebalances your position toward the token that fell, so you end up holding less of the winner than if you had just held. That shortfall is impermanent loss. It becomes permanent when you withdraw, and it disappears only if the price ratio returns to where it started.
Liquidity providers earn trading fees in exchange for this risk, so the useful question is whether fees outpace the loss. The calculator assumes full-range liquidity (not a concentrated Uniswap v3 range, which magnifies both fees and IL) and a simple, non-compounding fee APY.
With the default inputs, the impermanent loss is -5.719%. Change any value above to recalculate instantly.
How to use the impermanent loss calculator
- 1Enter the total dollar value you deposited into the pool.
- 2Enter each token’s price change since deposit (use 0% for a stablecoin).
- 3Choose the pool weights — most DEX pools are 50/50.
- 4Add the pool’s fee APY and how many days you have provided liquidity.
- 5Compare impermanent loss with fees earned to see if providing liquidity beat holding.
Formula and method
rA and rB are each token’s price now divided by its price at deposit. If you had simply held, your deposit would be worth w × rA + (1 − w) × rB of what you put in. A constant-product (or weighted) pool keeps the product of token balances constant, so arbitrage rebalances it and the position is worth rA^w × rB^(1−w). Impermanent loss is the ratio of the two minus one; for the classic 50/50 pool it reduces to 2√r ÷ (1 + r) − 1.
Fees are added as simple interest: deposit × fee APY × days ÷ 365. The break-even APY is the fee rate that would exactly offset the dollar loss over the same period. Concentrated-liquidity positions, token emissions and gas costs are not modelled.
- rA, rB
- Price ratio now ÷ at deposit for token A and token B
- w
- Pool weight of token A (0.5 for a 50/50 pool)
- r
- Relative price change rA ÷ rB
Worked examples
ETH doubles in an ETH/USDC pool
Holding $5,000 of ETH and $5,000 of USDC would be worth $15,000 after ETH doubles. The pool position is worth $10,000 × √2 ≈ $14,142, an impermanent loss of about 5.72% ($858). A year of 25% fee APY adds $2,500, leaving the LP about $1,642 ahead of holding.
Token crashes 75% with only 5% fee APY
With token A at a quarter of its price, r = 0.25 and IL = 2 × 0.5 ÷ 1.25 − 1 = −20%. The pool is worth $5,000 against $6,250 held. Six months of 5% APY fees ($246.58) do not come close, leaving the LP about $1,003 behind.
80/20 weighted pool with a 3x move
In an 80/20 pool, holding would give 0.8 × 3 + 0.2 × 1 = 2.6× the deposit ($26,000). The pool is worth 3^0.8 ≈ 2.408× ($24,082), so IL is about 7.38% — roughly half the 13.4% a 50/50 pool would suffer for the same 3x move. A year of 10% fees ($1,000) leaves the LP about $918 behind holding.
Frequently asked questions
What is impermanent loss?+
Impermanent loss is how much less a liquidity pool position is worth compared with simply holding the same tokens, caused by the pool rebalancing as prices diverge. It is called impermanent because it shrinks back if prices return to their original ratio, but it becomes real when you withdraw.
How much impermanent loss is there if one token doubles?+
In a 50/50 pool, a 2x relative price change causes about 5.7% impermanent loss. A 3x change causes about 13.4%, a 5x change about 25.5%, and a 50% drop about 5.7% — the loss depends on the ratio between the two prices, not the direction.
Can fees make up for impermanent loss?+
Yes, if the pool has enough trading volume. Fee income accumulates over time while IL depends only on the price ratio, so busy pools with modest price divergence often beat holding. Low-volume pools of volatile tokens often do not.
Which liquidity pools have the least impermanent loss?+
Pools of assets that move together, such as two stablecoins or ETH and a liquid staking token, have very little impermanent loss. Weighted pools like 80/20 also reduce IL for the heavier token compared with a 50/50 pool.
Does impermanent loss apply if both tokens fall?+
Only if they fall by different amounts. If both tokens drop 30%, the ratio is unchanged and there is no impermanent loss — though your position is still worth 30% less, exactly as holding would be.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.