Pool Configuration
Total USD value deposited
How long you plan to provide liquidity
Token Prices
Price when you entered the pool
Current or expected future price
Usually $1 for stablecoins
Usually stays at $1 for stablecoins
Fees & Rewards
Expected fees from trades
Additional token rewards
Entry/exit gas costs
Concentrated Liquidity (Uniswap V3)
Impermanent Loss
-0.62%
$62
Price Change
+25%
Ratio: 1.25x
Break-even APR
14.56%
APR needed to offset IL
Net P/L
$4
vs holding tokens
Position Comparison
| Scenario | Value | vs Initial |
|---|---|---|
| Initial Investment | $10,000 | - |
| If Held (No LP) | $11,250 | +$1,250 |
| LP Position (before fees) | $11,180 | +$1,180 |
| + Fees Earned | +$123 | - |
| - Gas Costs | -$50 | - |
| LP Position (after fees) | $11,254 | +$4 vs hold |
Impermanent Loss Curve
Hold vs LP Value at Different Price Ratios
IL Summary
Quick Answer: What is Impermanent Loss?
Impermanent loss (IL) occurs when you provide liquidity to an AMM pool and token prices change from your deposit ratio. For a 50/50 pool, if one token doubles (2x), you experience approximately 5.7% IL. If one token 4x's, IL is about 20%. The formula is: IL = 2 * sqrt(price_ratio) / (1 + price_ratio) - 1. Trading fees and yield farming rewards can offset IL. Our calculator shows your net position after fees.
Key Facts
- IL formula for 50/50 pools: 2 * sqrt(price_ratio) / (1 + price_ratio) - 1
- If one token 2x's, IL is approximately 5.7%
- If one token 4x's, IL is approximately 20%
- Stablecoin pairs have minimal IL due to price stability
- Trading fees and farming rewards can offset impermanent loss
- IL is only realized when you withdraw from the liquidity pool
- Concentrated liquidity (Uniswap V3) amplifies both fees and IL
Adjust Token A Final Price
See how price changes affect your impermanent loss and profitability
Personalized Insights
2 insights based on your inputs
Good News
Trading fees ($123) offset impermanent loss - you're profitable vs holding
Good News
Your 15% combined APR exceeds the 14.56% needed to offset IL
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Frequently Asked Questions
What is impermanent loss?
Impermanent loss (IL) occurs when you provide liquidity to an AMM pool and the price ratio of your deposited tokens changes. The pool rebalances your position, potentially leaving you with less value than simply holding the tokens. It's called "impermanent" because the loss is only realized when you withdraw - if prices return to the original ratio, the loss disappears.
How is impermanent loss calculated?
For a 50/50 pool, IL = 2 * sqrt(price_ratio) / (1 + price_ratio) - 1. For example, if one token doubles in price (ratio = 2), the IL is about -5.7%. If one token 4x's (ratio = 4), IL is about -20%. The loss increases with larger price divergence.
Can trading fees offset impermanent loss?
Yes! Trading fees (and additional yield farming rewards) can offset IL. If a pool generates 20% APR in fees and your IL over the same period is 10%, you're still profitable. Use this calculator to find the break-even APR needed to offset your IL.
Is impermanent loss always negative?
IL is typically expressed as a negative percentage because it represents the loss compared to holding. However, your total return can be positive if fees and rewards exceed the IL. This calculator shows both the IL and your net position after fees.
What are the best pools to minimize IL?
Stablecoin pairs (USDC/USDT) have minimal IL since prices stay close. Correlated asset pairs (ETH/stETH) also have low IL. High-volatility pairs with large price swings have the highest IL. Consider weighted pools (80/20) to reduce exposure to volatile assets.
How does concentrated liquidity affect IL?
Concentrated liquidity (like Uniswap V3) amplifies both your fees and your IL. If you concentrate in a narrow price range, you earn more fees when in range, but experience higher IL if prices move outside your range. Choose ranges carefully based on expected volatility.
How this works
Calculations are run entirely in your browser. No inputs are sent to our servers and no account is required. Formulas follow standard US definitions from the IRS and the CFPB where applicable; international users should confirm local tax and regulatory rules apply.
What this tool can’t do
When to consult a professional
This is a software engineering tool, not financial advice. Run the math here, then take the result to a certified financial planner, CPA, or your bank before making a decision that materially affects your money.
Sources
- [1]Consumer Financial Protection Bureau (CFPB)Official sourceconsumerfinance.govAccessed Apr 21, 2026
US consumer finance regulator; authoritative on mortgage disclosures, APR rules, credit cards.
Full-stack software engineer specializing in embedded systems, web architecture, and AI/ML. Founder of Practical Web Tools. Built the gesture-controlled drone IP acquired by KD Interactive (Aura Drone, sold on Amazon).