Impermanent Loss Calculator

Frequently Asked Questions

• What is impermanent loss?+
  Impermanent loss is the difference in value between providing two assets to a liquidity pool and simply holding those same assets in your wallet. When the assets’ prices diverge, the automated market maker rebalances the pool, leaving you with relatively more of the asset that fell and less of the one that rose, so your position is worth less than if you had done nothing.
• How is it calculated?+
  For a standard 50/50 constant-product pool, the ratio of liquidity-pool value to hold value is 2 times the square root of the price ratio, divided by one plus the price ratio. The price ratio is how much one asset moved relative to the other. The calculator works this out and expresses the shortfall as a percentage and, optionally, a cash figure for your deposit.
• Why is it called “impermanent”?+
  Because the loss only crystallises if you withdraw while prices are diverged. If the assets’ relative prices return to where they were when you deposited, the loss disappears entirely. It becomes a permanent, realised loss only at the moment you remove your liquidity.
• How big does it get?+
  It grows with the size of the price divergence between the two assets. A 1.25× move is well under one per cent, a 2× move is about 5.7 per cent, a 4× move around 20 per cent, and a 5× move roughly 25 per cent. The loss is symmetric — it does not matter which asset rises — and it accelerates as divergence increases.
• Does it mean I lost money overall?+
  Not necessarily. Impermanent loss is measured against holding, not against your starting cash. If both assets rose, your pool position can still be worth more than your deposit while being worth less than if you had merely held. And it ignores the trading fees you earn as a liquidity provider, which is the income that compensates for the risk.
• How do trading fees fit in?+
  Liquidity providers earn a share of the fees from trades against the pool. Over time those fees can offset the impermanent loss, and in active pools they can exceed it, making liquidity provision profitable overall. This calculator shows only the impermanent loss side; to judge a position you must weigh it against expected fee income.
• Which pools have the least impermanent loss?+
  Pools of assets that move together. A stablecoin-to-stablecoin pool has almost no impermanent loss because the price ratio barely changes, and pairs of correlated assets have less than uncorrelated ones. The risk is greatest when one asset can move dramatically against the other.
• Does this apply to all DeFi pools?+
  The formula here is for the classic 50/50 constant-product design used by many automated market makers. Pools with different weightings, concentrated-liquidity designs, or stable-swap curves behave differently and have their own impermanent-loss profiles, so treat this as the standard baseline rather than universal.
• Is this financial advice?+
  No. It is an educational tool to help you understand a specific risk of providing liquidity. Crypto and DeFi carry significant risks including smart-contract failure and total loss, and nothing here is a recommendation to provide liquidity or hold any asset.
• Is the Impermanent Loss Calculator free?+
  Completely free, with no account or usage limit. It runs entirely in your browser, collects no data, and works offline once the page has loaded.