Impermanent Loss Calculator (Uniswap-Style LP)
Calculate impermanent loss for a 50/50 liquidity pool from the two tokens' prices at deposit and now, with a dollar comparison versus holding. Educational, not investment advice.
Use 1 for a stablecoin.
Use 1 for a stablecoin.
Split 50/50 across the two tokens.
For a 50/50 constant-product pool (Uniswap v2-style), impermanent loss = 2√r ÷ (1 + r) − 1, where r is the ratio of the two tokens’ relative price changes. It is always ≤ 0 and grows as prices diverge: a 2× move ≈ −5.7%, 4× ≈ −20%. It is “impermanent” because it reverses if prices return, and fees earned can offset or exceed it. The dollar figures exclude trading fees and rewards. Educational, not investment advice. Everything runs in your browser.
About this tool
Impermanent loss is the central risk of providing liquidity to an automated market maker (AMM) like Uniswap, and it is one of the most misunderstood concepts in DeFi. When you deposit into a standard 50/50 pool, you supply equal dollar amounts of two tokens, and the protocol automatically rebalances your position as traders swap against it — selling you more of whichever token is falling and less of whichever is rising. The consequence is that if the two tokens' prices diverge, the value of your pooled position ends up lower than if you had simply held the original two tokens in your wallet. That gap is the impermanent loss. For a constant-product pool it follows a precise formula: IL = 2√r ÷ (1 + r) − 1, where r is the ratio of the two tokens' relative price changes since you deposited. The loss is always zero or negative and grows the more prices diverge — symmetric whether a token rises or falls. The well-known reference points: a 1.25× relative move is about 0.6%, 1.5× about 2.0%, 2× about 5.7%, 4× about 20.0%, and 5× about 25.5%. It is called 'impermanent' because it only crystallizes when you withdraw; if the price ratio returns to where it started, the loss disappears. Crucially, impermanent loss is not the whole story — liquidity providers also earn trading fees (and sometimes incentive rewards), which can offset or even exceed the loss, so a pool can be profitable despite IL. This tool also estimates the dollar shortfall versus holding for an initial deposit, excluding fees and rewards. It is educational and explicitly not investment advice. Everything runs in your browser; nothing is uploaded.
How to use it
- Enter token A's price when you deposited and its current price.
- Enter token B's price at deposit and now — use 1 for both if it is a stablecoin.
- Optionally enter your initial deposit value to see the dollar shortfall.
- Read the impermanent loss percentage and the pool-vs-hold comparison.
Frequently asked questions
- What is impermanent loss?
- It is the difference in value between keeping tokens in a liquidity pool versus simply holding them, caused by the pool rebalancing as prices diverge. The pooled position ends up worth less than holding when token prices move apart.
- How is impermanent loss calculated?
- For a 50/50 constant-product pool: IL = 2√r ÷ (1 + r) − 1, where r is the ratio of the two tokens' relative price changes. A 2× relative move gives about −5.7%; a 4× move about −20%.
- Why is it called "impermanent"?
- Because the loss only becomes permanent when you withdraw. If the relative price of the two tokens returns to what it was when you deposited, the impermanent loss disappears entirely.
- Can liquidity providing still be profitable with impermanent loss?
- Yes. Liquidity providers earn trading fees and sometimes incentive rewards. If those exceed the impermanent loss over your time in the pool, you come out ahead. This tool shows the IL itself, before fees and rewards.
- Does impermanent loss happen if both tokens move the same way?
- It depends on their relative move. If both tokens change price by the same factor (the ratio r stays 1), there is no impermanent loss. IL arises from divergence between the two tokens, not from absolute price moves.
- Is this investment advice?
- No. It is an educational calculator. Providing liquidity carries impermanent loss and smart-contract risk. Nothing is uploaded; all math runs in your browser.