Liquidity providing
Impermanent loss calculator
Enter both token prices at deposit and later. The calculator shows the loss versus holding, and whether the fee APR you expect covers it.
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Constant-product 50/50 pool (Uniswap v2 style). Concentrated liquidity positions lose more when price leaves the range.
Price ratio change
1.40×
A relative to B
Impermanent loss
-1.40%
vs. just holding
Fees earned
$592
LP vs hold, net
$424
fees covered the loss
If you just held
$12,000
LP position value (before fees)
$11,832
| Price ratio change | Impermanent loss | On $10,000 |
|---|---|---|
| 0.2× | -25.46% | -$2,546 |
| 0.25× | -20.00% | -$2,000 |
| 0.5× | -5.72% | -$572 |
| 0.75× | -1.03% | -$103 |
| 1× | 0.00% | $0 |
| 1.25× | -0.62% | -$61.92 |
| 1.5× | -2.02% | -$202 |
| 2× | -5.72% | -$572 |
| 3× | -13.40% | -$1,340 |
| 4× | -20.00% | -$2,000 |
| 5× | -25.46% | -$2,546 |
| 10× | -42.50% | -$4,250 |
The formula
For a constant-product pool, impermanent loss depends only on the ratio change r between the two token prices: loss = 2√r ÷ (1 + r) − 1. It is symmetric, so a token halving costs the same as it doubling.
Fees are the other side of the trade
Providing liquidity is a bet that trading fees over your holding period exceed the loss from price divergence. Stable pairs have tiny divergence and tiny fees. Volatile pairs have both. The net line in the results is the number that matters.
Frequently asked questions
- What is impermanent loss?
- The gap between what a liquidity position is worth and what the same tokens would be worth if you had simply held them. It happens because the pool sells the token that goes up and buys the one that goes down to keep the pair balanced.
- Why is it called impermanent?
- If prices return to the ratio you deposited at, the loss disappears. If you withdraw while the ratio is different, it becomes permanent.
- How big can it get?
- A 2x move in one token against the other costs 5.7%. A 5x move costs 25.5%. A 10x move costs 42.5%. Fees earned over the same period can offset it, which is the whole bet.
- Does this apply to Uniswap v3 concentrated liquidity?
- The direction is the same but the magnitude is larger inside a narrow range, and once price leaves the range you hold 100% of the losing token. This calculator models the full-range 50/50 case.