Impermanent Loss Calculator — DeFi Liquidity Pool Risk
Calculate impermanent loss for any AMM liquidity pool. Enter the initial and current prices of both tokens plus your deposit size to instantly see your IL percentage, HODL value vs LP value, and the exact dollar loss.
Annual fee yield of pool 1
Compare a second pool
How long you hold the LP position
Impermanent Loss
−5.72%
HODL Value
$15,000.00
LP Value (before fees)
$14,142.14
Dollar Loss vs HODL
−$857.86
Price Ratio (A/B change)
2.0000×
* Add Pool APR above to see fee income vs IL comparison and breakeven analysis.
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How to Use the Impermanent Loss Calculator
Enter the initial prices of Token A and Token B at the time you deposited into the liquidity pool, along with their current prices. Then enter your initial deposit in USD. The calculator assumes a 50/50 deposit split, which is the standard for Uniswap V2-style constant-product AMMs.
The tool computes the price ratio — how much Token A has moved relative to Token B — and applies the standard impermanent loss formula to give you the IL percentage. It then shows your estimated HODL value (what your tokens would be worth if you had simply held them) versus your LP value (what you actually have in the pool), along with the dollar difference.
Fee income can offset or even exceed impermanent loss in high-volume pools, so the optional Fee Income block adds it: enter the pool's Pool 1 APR from trading fees and the Holding Period in days (365 when left blank). The result then shows fees earned (simple APR, no compounding), your net P&L versus holding, and the price move at which a year of fees still covers the loss. Add a Pool 2 APR to compare a second pool side by side.
The Formula
Impermanent loss in a constant-product AMM (x · y = k) is determined entirely by the relative price change between the two tokens:
- Price Ratio (k) = (currentPriceA / initialPriceA) ÷ (currentPriceB / initialPriceB)
- IL% = (2 × √k / (1 + k) − 1) × 100
- HODL Value = (deposit / 2) / initialPriceA × currentPriceA + (deposit / 2) / initialPriceB × currentPriceB
- LP Value = HODL Value × (1 + IL% / 100)
- Dollar Loss = LP Value − HODL Value
The formula shows that IL is symmetric: a 2× price increase produces the same IL as a 2× price decrease. A price ratio of 1.0 (no relative change) produces zero impermanent loss. At a 4× price ratio, IL is approximately 20%; at 9× it reaches ~25%.
Practical Examples
Example 1 — ETH/USDC Pool (ETH doubles)
- Initial ETH price: $1,000 | Initial USDC price: $1
- Current ETH price: $2,000 | Current USDC price: $1
- Deposit: $10,000 (50/50 split)
- Price ratio: 2.0×
- IL: ~5.72%
- HODL value: ~$15,000 | LP value: ~$14,142
- Dollar loss vs HODL: ~$858
In this scenario, simply holding ETH and USDC would have returned $15,000, while providing liquidity returns only ~$14,142 before fees. The pool auto-rebalances, selling ETH as it rises, which is why LP underperforms a pure hold in a bull market.
Example 2 — BTC/ETH Pool (BTC Outperforms ETH)
- Initial BTC: $30,000 | Initial ETH: $2,000
- Current BTC: $60,000 | Current ETH: $2,500
- Price ratio: (2× BTC gain) / (1.25× ETH gain) = 1.6×
- IL: ~2.70%
When both tokens appreciate but at different rates, the IL is lower than when one token is stablecoins. Providing liquidity in two correlated assets (like BTC/ETH) generally results in lower impermanent loss than token/stablecoin pairs.
When Is Providing Liquidity Still Profitable?
Impermanent loss only matters if it exceeds the trading fees earned. A Uniswap V2 pool with 0.3% fees and $1M daily volume on $1M TVL generates ~110% APR in fees alone. Even a 10% IL is easily offset. Evaluate the net return = fees earned − impermanent loss before providing liquidity.
Frequently Asked Questions
Impermanent loss is the difference in value between holding tokens in a liquidity pool versus simply holding them in your wallet. It occurs because AMM pools automatically rebalance as prices change, effectively selling the token that is appreciating and buying the one that is falling. The loss is called 'impermanent' because it disappears if prices return to their original ratio — but becomes permanent when you withdraw.
The term 'impermanent' refers to the fact that if the relative price between the two tokens returns to the same ratio as when you deposited, the IL becomes zero and you withdraw exactly what you put in (plus fees). However, if you withdraw while prices are diverged from your entry ratio, the loss crystallizes and becomes permanent. Many DeFi analysts now prefer the term 'divergence loss' for clarity.
Impermanent loss is minimal in stable/stable pairs (e.g., USDC/USDT) because the two tokens rarely diverge significantly in price. This is why stablecoin pools on Curve Finance attract large amounts of liquidity — the IL risk is near zero, and fees provide a reliable yield. IL is highest in volatile/stable pairs (e.g., ETH/USDC) and moderate in volatile/volatile pairs (e.g., ETH/BTC) depending on correlation.
Uniswap V3 uses concentrated liquidity, which can amplify impermanent loss if the price moves out of your selected range — and reduce it if the price stays within range. The V3 IL formula differs from V2. This calculator uses the standard Uniswap V2 (constant-product x·y=k) formula. For V3 concentrated liquidity positions, the IL depends on your price range bounds and is more complex to calculate.
Every swap in a Uniswap V2 pool earns liquidity providers a 0.3% fee, distributed proportionally. High-volume pools can generate 50–200%+ APR in fees, which can far exceed even a 10–20% impermanent loss. The break-even question is: does fee income over your holding period exceed the IL percentage? Tools like the LiquidityFolio or DeBank show real-time fee APR vs IL for active positions; this calculator's Fee Income block does the same for a planned position.
In a standard 50/50 AMM pool, the maximum theoretical IL is 100% — which would occur if one token's price drops to zero. In practice, a 10× price move between the two tokens produces ~34% impermanent loss, a 50× move produces ~75% IL, and a 100× move produces ~82% IL. Most real-world IL for liquid token pairs stays in the 5–25% range during normal market cycles.
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