How to use the impermanent loss calculator
Enter the dollar value of your deposit and the names of the two tokens. Type each token's USD price when you deposited and its price now (or a price you want to test). For a stablecoin pair side, leave both prices at 1. Optionally add the pool's fee APR and the number of days in the pool โ the calculator adds the estimated fees to the LP value and compares the total with holding.
The pool composition table shows how many tokens you deposited and how many the pool holds for you now โ the pool has rebalanced you into more of the token that fell and less of the one that rose.
The impermanent loss formula
For a constant-product pool (xยทy = k) with equal weights, impermanent loss depends only on how much the price ratio between the two tokens changed, not on the direction. If token A doubles against token B, the loss is the same as if it halved.
r = (priceA_now / priceA_entry) / (priceB_now / priceB_entry)
IL = 2ยทโr / (1 + r) โ 1
r = 1.5 โ โ2.02% r = 2 โ โ5.72%
r = 3 โ โ13.4% r = 5 โ โ25.5%Example: ETH/USDC
Deposit $10,000 into an ETH/USDC pool with ETH at $3,000 โ 1.667 ETH and 5,000 USDC. ETH rises to $4,500. Holding would be worth $12,500. The LP position now holds about 1.361 ETH and 6,124 USDC, worth about $12,247 โ an impermanent loss of 2.02%, or about $253. If the pool earned 12% APR in fees over 90 days, that adds roughly $296, so the LP ends about $43 ahead of holding. A bigger price move or lower fees would flip the result.
Why it is called โimpermanentโ
If prices return to their entry ratio, the loss disappears โ hence โimpermanentโ. But if you withdraw while the ratio is different, the loss is realized. In practice, pairs of correlated assets (two stablecoins, or a token and its liquid-staking version) have little impermanent loss, while volatile/stable pairs and unrelated volatile pairs can have a lot.
- Concentrated-liquidity pools (Uniswap v3-style) earn more fees per dollar inside the range but suffer larger impermanent loss, and stop earning when the price leaves the range. This calculator models full-range 50/50 pools.
- Weighted pools (80/20 and similar) have smaller impermanent loss than 50/50 for the same price move.
- Gas costs for depositing, claiming and withdrawing reduce returns on small positions; check them with the Gas Fee Calculator.
LP or staking?
If you mainly want yield on one coin and do not want exposure to a second asset, single-sided staking avoids impermanent loss entirely โ compare the numbers with the Staking APY Calculator. If you want to stay in stablecoins, compare routes and depeg risk with the Stablecoin Fee Comparison tool.
Break-even fee yield
A useful way to read the result is to ask: how much fee income does this pool need to beat holding? With a 1.5x price change the loss is about 2%; if you plan to stay 90 days, the pool must earn roughly 8% APR in fees just to break even (2% ร 365 / 90). With a 2x change the loss is about 5.7%, which needs over 23% APR over the same period. Enter different fee APRs and days to find the break-even for your own scenario.
Remember that fee APRs shown by pools are usually based on recent volume and can fall quickly when trading activity drops, while the price divergence that causes impermanent loss can happen in a single day.
Frequently asked questions
+What is impermanent loss?
The difference between the value of tokens in a liquidity pool and the value the same tokens would have if you had simply held them, caused by the pool rebalancing as prices change.
+How is impermanent loss calculated?
For a 50/50 constant-product pool: IL = 2ยทโr / (1 + r) โ 1, where r is the change in the price ratio of the two tokens. A 2x change gives about โ5.7%.
+Can trading fees cover impermanent loss?
Sometimes. Enter the pool's fee APR and the days you stay in the pool; the calculator shows whether the LP plus fees beats holding.
+Does the direction of the price move matter?
Not for a 50/50 pool: a token doubling or halving relative to the other produces the same percentage loss.
+Does this work for Uniswap v3?
It models full-range 50/50 positions. Concentrated positions have larger losses within a narrower range and need a range-specific model.
Calculations run entirely in your browser; nothing you type is sent to KOT.CASH. Results are estimates for information only and are not financial, tax or legal advice.