Impermanent Loss Calculator
See what impermanent loss a DeFi liquidity position would suffer. Enter how much each asset's price changes to compare providing liquidity against simply holding. No signup, runs entirely in your browser.
⏱ 5 min read · Complete guide below
Impermanent loss is the gap between providing liquidity and simply holding. It grows as the two assets' prices diverge and is zero only if they move together. Trading fees you earn as a liquidity provider can offset it — this figure does not include those fees or token rewards.
How the Impermanent Loss Calculator Works
- 1Optionally enter your total deposit value, split 50/50 between the two assets.
- 2Enter the price change of Asset A since you deposited.
- 3Enter the price change of Asset B — set it to 0 for a stablecoin.
- 4Read the impermanent loss percentage, and the value held versus in the pool.
Worked Example: One Asset Doubles Against a Stablecoin
Suppose you provide $10,000 of liquidity to an ETH/USDC pool — $5,000 of ETH and $5,000 of USDC. ETH then rises 100% while USDC stays flat. The price ratio changed by a factor of 2, so the pool value relative to holding is 2√2 ÷ (1 + 2) = 0.943, an impermanent loss of about −5.7%. If you had simply held, your assets would be worth $15,000; in the pool they are worth about $14,140 — roughly $860 less.
That $860 is the cost of the pool rebalancing you out of ETH as it rose. It is not automatically a loss overall: as a liquidity provider you also earned trading fees the whole time. If those fees exceeded $860, you came out ahead of holding; if not, you would have been better off just holding. The lesson is that impermanent loss is only one side of the ledger — always weigh it against the fees and rewards you expect to earn.
Why the Pool Formula Creates Impermanent Loss
Impermanent loss is not a bug or a fee — it is a direct consequence of how a constant-product automated market maker works. A standard pool holds two assets so that the product of their quantities stays constant: x × y = k. When the market price of one asset moves, arbitrage traders step in and trade against the pool until its internal price matches the outside market. Every one of those profitable arbitrage trades shifts the pool's composition, and it always does so in the unfavourable direction: the pool sells the asset that is rising and buys the one that is falling. You end up holding less of the winner and more of the loser than you started with. Because the pool is mathematically forced to rebalance this way, any price divergence leaves your position worth less than if you had simply held the two assets — that gap is the impermanent loss, and it grows non-linearly as prices pull further apart.
Concentrated Liquidity Changes the Math
Newer designs like Uniswap v3 let you concentrate your capital within a specific price range instead of spreading it across every possible price. Inside your chosen range you earn far more fees per dollar deposited, which is attractive — but the trade-off is that impermanent loss is amplified in that same band, and if the price exits your range entirely your position converts fully into the weaker asset and stops earning fees until price returns. This makes concentrated liquidity a more active strategy: it can outperform a classic 50/50 pool when you correctly predict where price will trade, and underperform it when the market moves outside your range. The core intuition this calculator gives you — that divergence is what costs you — still applies, but the magnitude is steeper the tighter your range.
Managing Impermanent Loss
Correlated pairs lose less
Assets that move together diverge less, so they suffer less impermanent loss. Two large caps that trend similarly are gentler than a volatile alt paired with a stablecoin.
Stable pairs are safest
Stablecoin-to-stablecoin pools barely diverge, so impermanent loss is minimal. The trade-off is usually lower fee yields.
Weigh fees against loss
Liquidity provision is only worth it if fees plus rewards beat the impermanent loss. Estimate both before committing capital.
Loss is symmetric
It does not matter which asset pumps — divergence in either direction costs the same. A crash in one asset creates loss just like a rally.
It is only realized on exit
Impermanent loss becomes permanent when you withdraw. If prices converge again before you exit, the loss shrinks or disappears.
Mind the other risks
Smart-contract bugs, pool exploits, and token depegs can cost far more than impermanent loss. Only provide liquidity on protocols you trust.
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 your position, leaving you with less of the asset that rose and more of the one that fell — so your pool value ends up lower than if you had just held. It is called "impermanent" because it only becomes realized when you withdraw.
How is impermanent loss calculated?
For a standard 50/50 constant-product pool, impermanent loss depends on the ratio of the two assets' price changes. If that ratio is k, the pool value relative to holding is 2√k ÷ (1 + k), and impermanent loss is that figure minus one. The larger the divergence between the two assets, the bigger the loss. This tool takes each asset's price change and computes the result for you.
When is impermanent loss zero?
It is zero only when the two assets' prices move by the same percentage — including when neither moves. Any divergence between them creates loss, and the loss is symmetric: it does not matter which asset outperforms, only how far apart they move. A pair of two stablecoins has almost no impermanent loss because they barely diverge.
Do trading fees offset impermanent loss?
Yes, and this is the whole point of providing liquidity. As a liquidity provider you earn a share of the pool's trading fees, plus any token incentives. Whether liquidity provision is profitable depends on whether those fees and rewards exceed the impermanent loss over the period. This calculator shows the loss side only — you must weigh it against the fees you expect to earn.
How can I reduce impermanent loss?
Choose pairs whose prices tend to move together — for example two correlated large caps, or a stablecoin pair, which have minimal divergence. Stablecoin-to-stablecoin pools have almost no impermanent loss. Concentrated-liquidity and single-sided pools change the dynamics but introduce their own risks. Higher expected fees can also justify accepting more impermanent loss.
Is my data stored anywhere?
No. All calculations run entirely in your browser. Nothing you enter is sent to a server or stored.