What is impermanent loss?

Impermanent loss (IL) is the difference in value between holding tokens in your wallet versus depositing them into an AMM liquidity pool. When prices diverge from your entry ratio, the pool's constant product formula automatically rebalances your holdings, leaving you with less total value than if you had simply held the tokens. It is called "impermanent" because the loss disappears if prices return to the original ratio.

What formula is used to calculate IL?

For a constant product AMM (x*y=k): IL = 2 * sqrt(price_ratio) / (1 + price_ratio) − 1, where price_ratio = (current_price_A / initial_price_A) / (current_price_B / initial_price_B). This gives IL as a fraction of the hodl value. The result is always zero or negative — a positive IL is impossible with this formula.

Does IL apply to stablecoin pairs?

IL is minimal for stablecoin-to-stablecoin pairs (e.g. USDC/USDT) because prices rarely diverge. The main risk there is smart contract risk and peg breaks. Volatile pairs like ETH/BTC or ETH/SHIB carry significant IL risk and require higher fee income to compensate.

When does impermanent loss become permanent?

IL becomes permanent (realized) when you withdraw your liquidity from the pool at a price ratio different from when you deposited. If you withdraw and prices have diverged, you crystallize the loss. If prices return to the original ratio before you withdraw, IL is zero.

How does fee income offset IL?

Every swap in the pool earns a trading fee (e.g. 0.3% on Uniswap v2) distributed proportionally to liquidity providers. If the cumulative fees earned exceed the IL, your net position is profitable. The fee APR breakeven shown by this tool is the minimum annual fee yield your position must generate to offset the current IL.

Does this calculator work for Uniswap v3 concentrated liquidity?

No. This calculator uses the standard constant product (x*y=k) formula, which applies to full-range liquidity positions (Uniswap v2, SushiSwap, PancakeSwap v2, etc.). Uniswap v3 concentrated liquidity has amplified IL within the price range and a different formula. Use a dedicated v3 IL tool for concentrated positions.

Impermanent Loss Calculator

Enter initial and current token prices for both assets to instantly see impermanent loss percentage, dollar loss, and the fee APR needed to break even.

Pool Parameters

Token A Price (USD)

Initial price

Current price

Token B Price (USD)

Initial price

Current price

Initial Liquidity Deposit (USD) optional

Enter to see dollar loss and fee breakeven estimates.

Quick scenarios (Token A price change vs stable Token B)

Enter prices above and click Calculate.

Impermanent Loss 0.00%

0.00%

Enter values to compute.

Held Value (HODL)

—

If you never entered the pool

Pool Value

—

Current value in pool

Dollar Loss (IL)

—

Pool value minus HODL value

Price Ratio Change

—

Current vs. initial A/B ratio

Pool Value HODL Value

Pool is worth 100% of the equivalent HODL position.

Pool Token Breakdown

Token

HODL qty Pool qty

Token A

— —

Token B

— —

Formula Reference

r = (P_A_new / P_A_init) / (P_B_new / P_B_init)
IL = 2 × √r / (1 + r) − 1

Applies to constant product AMMs (x×y=k). IL is always ≤ 0 (a cost, never a gain).

Summary

The Impermanent Loss Calculator helps DeFi liquidity providers understand the hidden cost of providing liquidity to AMM pools such as Uniswap, SushiSwap, or PancakeSwap. By entering the initial and current prices of both tokens in your pool, the tool computes the exact impermanent loss percentage, the dollar difference between holding the tokens outright versus keeping them in the pool, and the trading fee APR required to break even. Use this before committing funds to any liquidity pool.

How it works

Enter the initial price of Token A and Token B in USD when you first added liquidity.
Enter the current price of Token A and Token B in USD.
Optionally enter your total initial liquidity deposit in USD.
The calculator applies the constant product formula (x*y=k) to determine the rebalanced pool ratio.
It computes the value you would hold if you never entered the pool versus the current pool value.
Impermanent loss, dollar loss, and the fee APR required to break even are displayed instantly.

Use cases

Evaluate whether to provide liquidity to a Uniswap v2-style pool before depositing.
Understand current losses in an active liquidity position during a price divergence.
Compare IL risk across different token pairs (stablecoin pairs vs. volatile pairs).
Determine the minimum trading fee APR your pool must generate to offset IL.
Estimate loss scenarios for extreme price movements (2x, 5x, 10x price changes).
Educate yourself on AMM mechanics and why IL is often called "divergence loss."
Decide whether to exit a pool or hold through price volatility.
Estimate impermanent loss for full-range constant product pools across Uniswap v2, SushiSwap, or PancakeSwap.

Frequently Asked Questions

Last updated: 2026-10-05 · Reviewed by Nham Vu