Impermanent Loss Calculator
Estimate the impermanent loss on a liquidity position when the two assets’ price ratio changes.
Calculator
Impermanent loss is the difference in value between providing liquidity to a two-asset pool and simply holding the assets, when their relative price changes. Formula: IL = 2·√r / (1+r) − 1.
For educational and informational purposes only — not financial, investment or tax advice. Results are estimates based on the figures you enter.
How the calculation flows
The inputs you enter feed a fixed formula to produce the result. Change any input to see how sensitive the outcome is.
Conceptual diagram
What the impermanent loss calculator does
The Impermanent Loss calculator estimates how much value a liquidity provider gives up, versus simply holding, when the two assets in a pool change in relative price. “Impermanent” because the loss shrinks if prices return to where you started — and becomes permanent the moment you withdraw.
How it works
Automated market makers rebalance a 50/50 pool as prices move, leaving you with more of the asset that fell and less of the one that rose. The standard formula compares that rebalanced value to just holding.
Worked example
Illustrative example — your figures will differ
If one asset doubles relative to the other (r = 2, the calculator’s default):
- IL = 2 × √2 ÷ 3 − 1 = −5.72%
- You would be about 5.7% worse off than if you had simply held the two assets — before counting the trading fees the position earns.
Loss deepens as prices diverge
Impermanent loss is near zero for small moves and grows the further the ratio departs from where you entered — in either direction.
| Price ratio change | Impermanent loss |
|---|---|
| 1.25× (±25%) | −0.6% |
| 1.5× | −2.0% |
| 2× (doubles) | −5.7% |
| 4× | −20.0% |
| 5× | −25.5% |
How to use it
- Enter the price ratio change between the two pooled assets (2 means one doubled relative to the other).
- Read the estimated impermanent loss versus holding.
- Compare that figure against the fees and rewards the pool pays — they can offset, or fail to offset, the loss.
Limits to keep in mind
- It excludes trading fees and incentive rewards, which are the whole reason to provide liquidity.
- It assumes a standard 50/50 constant-product pool; weighted or concentrated pools behave differently.
- It ignores smart-contract and depeg risk.
Related reading
- Glossary: Liquidity, DEX and Yield Farming
- Related tool: Staking & Compound Interest Calculator
For education only — not financial or investment advice. Estimates exclude fees and rewards.