Impermanent Loss Calculator

Enter your deposit amount and how much the price ratio has changed to calculate impermanent loss for a standard 50/50 liquidity pool.

Impermanent Loss Calculator

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Total deposit value ($, split 50/50 at entry)

Price ratio change (e.g. 2 = doubled, 0.5 = halved)

Impermanent loss (%)	-5.72%
Value if you had just held (HODL)	$15,000.00
Value in the liquidity pool	$14,142.14
Impermanent loss in dollars	$857.86

Assumes a standard 50/50 constant-product pool (like Uniswap v2). Excludes trading fees earned, which can partially or fully offset this loss - and excludes gas costs and any liquidity mining rewards.

The formula

Price ratio (R) = New price / Original price, for one asset relative to the other Impermanent Loss % = 2 x sqrt(R) / (1 + R) - 1 This applies to a standard 50/50 constant-product pool. IL is symmetric: a 50% price drop (R=0.5) produces the SAME loss percentage as a 100% price increase (R=2)

Example

$10,000 deposited into an ETH/USDC pool (50/50), and ETH's price doubles (R=2): impermanent loss of -5.72%. Simply holding the original tokens would be worth $15,000, but the LP position is worth about $14,142 - an impermanent loss of roughly $858, before counting any trading fees earned.

Step-by-step guide

Enter your total deposit value - the amount you'd put into the pool, split evenly between the two assets.
Enter the price ratio change you're modeling - 2 for a doubling, 0.5 for a halving, 4 for a 4x move, etc.
Compare the dollar loss to expected fee income - impermanent loss alone doesn't determine whether providing liquidity was a good decision; trading fees earned can offset or exceed it.

Why "impermanent" is a somewhat misleading name

The loss is called "impermanent" because it only becomes permanent (realized) once you withdraw your liquidity - if the price ratio returns to exactly where it started before you exit, the loss vanishes entirely, since your position rebalances back too. In practice, though, prices rarely return to their exact starting point, especially for volatile asset pairs, which is why many liquidity providers end up experiencing this loss as genuinely permanent. The name captures the mathematical mechanism accurately, but can create a false sense of security for people who don't realize how often the loss actually gets locked in at withdrawal.

Common mistakes

Assuming IL only happens when a price goes UP - the formula is symmetric, meaning a price drop of the same ratio magnitude produces an identical percentage loss to a price increase.

Evaluating IL in isolation without weighing trading fee income - a high-volume pool can generate enough fees to fully offset a moderate impermanent loss, making the overall position still profitable despite the IL.

Frequently asked questions

Does impermanent loss happen in stablecoin-to-stablecoin pools?

Minimally - since both stablecoins are designed to maintain a fixed price relative to each other, the price ratio rarely changes significantly, keeping IL close to zero in normal conditions (though a stablecoin de-pegging event would be an exception).

What's the break-even trading fee APR needed to offset a given IL?

Roughly, if you expect a certain IL percentage over a holding period, your fee income needs to exceed that percentage over the same period - for example, an expected 5.72% IL over 6 months would need over an 11.44% annualized fee APR to fully offset.

Does Uniswap v3's concentrated liquidity change this formula?

This formula covers standard full-range (v2-style) pools. Concentrated liquidity positions in v3 can experience amplified impermanent loss relative to the capital deployed, since the same dollar amount is concentrated in a narrower price range.

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