Impermanent Loss Calculator

How the Impermanent Loss Calculator works

Short answer: Impermanent loss is how far a 50/50 constant-product liquidity position falls behind simply holding the two tokens after their relative price changes. Pool value scales with √(price ratio A × price ratio B), holding value with their average. The bigger the divergence, the bigger the loss: a 2× move in one token costs about 5.7%, before any trading fees earned.

This calculator compares an unlevered 50/50 constant-product liquidity position (the classic Uniswap v2 style pool) with simply holding both tokens. You enter the price change of each token, a fee APR and a holding period, and it shows the impermanent loss and whether the estimated fee income covers it. It is meant for liquidity providers checking a pool before depositing or withdrawing.

What you enter

• Initial liquidity (USD), default 10,000, split equally between the two assets
• Asset A price change %, default +50 (any value of −100 or below is treated as about −99.99%)
• Asset B price change %, default 0
• Fee APR %, default 12 (negative values count as 0)
• Days held, default 30

What it shows

• HODL value: what the two original token amounts are worth now
• Pool value: what the liquidity position is worth now, before fees
• Impermanent loss %: pool value versus HODL value
• Estimated fee income in USD for the chosen days
• Net vs HODL: pool value plus fee income minus HODL value, green if positive and red if negative

How to use it

1. Enter the USD value you deposit into the pool.
2. Enter the price change of each token since the deposit, in percent; for a stablecoin pair side enter 0.
3. Enter the pool's fee APR, as shown by the protocol or estimated from its volume.
4. Enter how many days you have held or plan to hold the position.
5. Read the impermanent loss and the Net vs HODL card to see whether fees cover the loss.

Formula

fA = 1 + A% / 100, fB = 1 + B% / 100. HODL value = capital × (fA + fB) / 2. Pool value = capital × √(fA × fB). Impermanent loss = pool value / HODL value − 1. Fee income = capital × fee APR / 100 × days / 365 (simple interest on the initial deposit). Net vs HODL = pool value + fee income − HODL value.

Worked example

Hypothetical inputs: 10,000 USD deposit, asset A +50%, asset B 0%, fee APR 12%, 30 days. HODL = 10,000 × (1.5 + 1) / 2 = 12,500 USD. Pool = 10,000 × √1.5 ≈ 12,247.45 USD. Impermanent loss = 12,247.45 / 12,500 − 1 ≈ −2.02%. Fee income = 10,000 × 0.12 × 30 / 365 ≈ 98.63 USD. Net vs HODL ≈ 12,247.45 + 98.63 − 12,500 ≈ −153.92 USD. At 12% APR, fees would need about 77 days to cover the 252.55 USD gap.

How to read the result

• Only the relative move matters: if both tokens rise or fall by the same percentage, impermanent loss is zero.
• For a 50/50 pool the loss is about 0.6% at a 1.25× ratio change, 2.0% at 1.5×, 5.7% at 2×, 13.4% at 3× and 25.5% at 5×; a 50% drop in one token (0.5×) costs the same 5.7% as a 2× rise.
• A positive Net vs HODL means the estimated fees more than offset the divergence; a negative value means holding would have done better.
• The loss is called impermanent because it shrinks if prices return to the deposit ratio, but it becomes final when you withdraw.

Limits and cautions

• The model covers only unlevered 50/50 constant-product pools. Concentrated-liquidity positions (such as Uniswap v3 ranges), weighted pools and stableswap curves have different and often larger losses.
• Fee income is simple interest on the initial deposit at a constant APR; real fees vary with volume and are earned on the changing pool value.
• Gas, incentive token rewards, MEV, depegs and smart-contract risk are not included.
• The result depends only on start and end prices; it assumes arbitrage keeps the pool at market price throughout.

Common questions

How is impermanent loss calculated?

For a 50/50 constant-product pool, divide √(fA × fB) by (fA + fB) / 2 and subtract 1, where fA and fB are each token's price multiple since deposit. With one token at 2× and the other flat, that gives about −5.7%.

Can trading fees offset impermanent loss?

Yes, if the pool earns enough fees over the holding period. The calculator estimates fee income as capital × APR × days / 365 and compares the total with holding.

Is there impermanent loss in a stablecoin pool?

Only if one stablecoin moves away from the other. If both stay at 1 USD the ratio does not change and the loss is zero, but a depeg can cause a large loss.

Does impermanent loss happen if both tokens go up?

Only when they rise by different amounts. If both rise by the same percentage, the ratio is unchanged and the loss is zero.