How to Use the Impermanent Loss Calculator
Enter the two token prices at the moment you deposited, the amount you deposited, and the two prices you want to test. The deposit is split equally between the tokens. Fees earned is optional: leave it at zero to see the pool on its own, or type what the pool paid you.
The result compares two outcomes at the future prices. Pool value is what the liquidity position is worth. Value if held is what the same tokens would be worth if you had never deposited them. The difference is the gap between those two.
What Is Impermanent Loss?
The impermanent loss definition is the gap between a liquidity position and simply holding the same tokens. What is impermanent loss, in short: when the two prices move apart, a 50/50 pool holds more of the token that fell and less of the token that rose, so it is worth less than the coins you started with would be.
The loss is called impermanent because it shrinks if the prices move back. It becomes permanent when you withdraw. The longer explanation, with ways people limit it, is in the guide to impermanent loss.
How Is Impermanent Loss Calculated?
The calculator uses a constant-product pool, the model an automated market maker uses for a full-range 50/50 pair. Half the deposit buys token A and half buys token B at the starting prices. The product of those two amounts stays fixed while the prices change, and the pool rebalances so each token is again half of the value.
Pool value is twice the square root of that product times the two future prices. Holding value is the starting amounts priced at the future prices. Impermanent loss is the pool minus the holding, divided by the holding, before any fees. Fees you type in are added to the pool value and to the difference, not to the percentage.
Impermanent Loss Calculation Example
Deposit $1,000 when ETH is $2,000 and a stablecoin is $1, so the position starts as 0.25 ETH and 500 stablecoins. ETH then doubles to $4,000 and the stablecoin stays at $1. The pool is worth $1,414.21 and the same tokens held outside the pool are worth $1,500.
The difference is -$85.79, which is -5.72% against holding. Both outcomes are above the $1,000 you deposited. The pool gained less than holding did.
Understanding Your Results
Pool value is the position marked at the future prices after the pool has rebalanced. Value if held marks the original tokens at those same prices, with no rebalancing. Difference is pool minus holding, so a negative number means the pool is behind.
A negative percentage can sit next to an absolute gain. In the example the pool is worth more than the deposit and still shows impermanent loss, because holding would have been worth more. Compare the pool with the holding, not only with what you deposited.
Impermanent Loss in DeFi: Fees and Pool Assumptions
Impermanent loss in DeFi here means one kind of pool: two tokens, equal weights, constant product, and the full price range. Pools with other weights, and concentrated ranges, follow different maths and are not what this result describes.
Trading fees are not inside the base figure. The fees field adds an amount you supply; it does not estimate the fees a pool might earn. Rewards paid in a third token are left out unless you include their value in that field yourself.
Frequently Asked Questions
Can Impermanent Loss Happen When Prices Rise?
Yes. In the example both the pool and the holding are above the deposit, and the pool is still -5.72% behind holding, because the price of one token moved and the other did not.
Can My Pool Position Gain Value and Still Have Impermanent Loss?
Yes. Impermanent loss compares the pool with holding, not with the amount you deposited. A pool can be up in money and down against holding at the same time.
Does This Calculator Include Trading Fees?
Only if you type them into Fees earned. They raise the pool value and the difference; the impermanent loss percentage stays the price effect alone.
Does It Support Concentrated Liquidity?
No. The model is a full-range 50/50 constant-product pool. A concentrated range needs its own price bounds, which this calculator does not take.