Impermanent Loss Calculator
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The Cost of Providing Liquidity That Simply Holding Never Charges
Depositing two tokens into a constant-product automated market maker pool means the pool's algorithm continuously rebalances the ratio between them as the price moves — selling the appreciating asset and buying the depreciating one to keep the pool's product constant. That rebalancing is exactly why a liquidity provider usually ends up with less value than someone who just held the two tokens outright once prices diverge. The gap between those two outcomes is impermanent loss, and it depends only on how much the price ratio has moved, not on which direction.
The Formula
IL = (2 × √(Price Ratio) ÷ (1 + Price Ratio)) − 1
This is the standard result for a 50/50 constant-product pool (the Uniswap V2-style model). The formula is symmetric: a price ratio of 2 (price doubled) and a ratio of 0.5 (price halved) produce the same magnitude of impermanent loss.
Impermanent Loss by Price Movement
| Price Change | Price Ratio | Impermanent Loss |
|---|---|---|
| −50% | 0.50 | 5.72% |
| −25% | 0.75 | 1.03% |
| −10% | 0.90 | 0.14% |
| +10% | 1.10 | 0.11% |
| +25% | 1.25 | 0.62% |
| +50% | 1.50 | 2.02% |
| +100% | 2.00 | 5.72% |
| +300% | 4.00 | 20.00% |
Impermanent loss only measures the shortfall against holding — it excludes any trading fees earned while providing liquidity, which can offset or exceed it depending on pool volume.
Where This Calculation Matters
- Choosing a pool — pairs where both tokens tend to move together (like two stablecoins) carry far less impermanent loss risk than a volatile token paired against a stable one.
- Evaluating fee income — deciding whether the trading fees a pool has earned are enough to outweigh the impermanent loss incurred over the same period.
- Exit timing — recognizing that impermanent loss is only "impermanent" if the price ratio returns to where it started before withdrawal; otherwise it's realized as a permanent shortfall.
How to Use This Calculator
- Enter the token price at the time of deposit into the pool.
- Enter the current token price.
- Optionally enter the initial pool deposit value in dollars to see the loss expressed in dollar terms.
- Select Calculate to see the impermanent loss percentage.
Related Calculations
To size a liquidity position's dollar performance overall, see the Crypto ROI Calculator. For transaction costs on entering or exiting a pool, check the Ethereum Gas Fee Calculator.