Calculator Inputs
Example Data Table
| Token Pair | Initial Deposit | Initial A Price | Final A Price | Initial B Price | Final B Price | Fees | Costs | Impermanent Loss % |
|---|---|---|---|---|---|---|---|---|
| ETH/USDC | 10,000 | 2,000 | 3,000 | 1.00 | 1.00 | 250 | 40 | -2.0204% |
| BTC/USDT | 8,000 | 50,000 | 40,000 | 1.00 | 1.00 | 180 | 25 | -0.6192% |
| SOL/USDC | 6,500 | 120 | 180 | 1.00 | 1.00 | 140 | 20 | -2.0204% |
Formula Used
This calculator assumes a 50/50 constant product liquidity pool. The starting deposit is split equally by value between both assets.
- Initial token amounts: Token A = (Deposit ÷ 2) ÷ Initial Price A, Token B = (Deposit ÷ 2) ÷ Initial Price B
- Price ratio multiple: r = (Final Price A ÷ Final Price B) ÷ (Initial Price A ÷ Initial Price B)
- Hold value: Hold = (Initial Token A × Final Price A) + (Initial Token B × Final Price B)
- Impermanent loss factor: IL Factor = (2 × √r) ÷ (1 + r)
- LP value before fees: LP = Hold × IL Factor
- Impermanent loss percent: IL % = ((LP ÷ Hold) − 1) × 100
- Net LP value: Net LP = LP + Fees Earned − Other Costs
The loss is called impermanent because it depends on the price ratio at withdrawal time. It becomes realized when liquidity is removed.
How to Use This Calculator
- Enter the two asset symbols for your liquidity pair.
- Provide the starting prices for both assets when liquidity was added.
- Enter the latest or expected exit prices for both assets.
- Input the total starting deposit value placed into the pool.
- Add fee income and any other costs such as gas or swap impact.
- Submit the form to compare holding versus liquidity providing.
- Review the result cards, detailed table, and graph.
- Use the CSV or PDF buttons to save the scenario.
FAQs
1. What is impermanent loss?
Impermanent loss is the value gap between holding tokens directly and providing them in a liquidity pool after prices move. It appears because automated pools rebalance token amounts as market prices change.
2. Why does a bigger price move increase loss?
Larger price divergence forces stronger rebalancing inside the pool. You end up with more of the weaker asset and less of the stronger asset, which widens the gap versus simple holding.
3. Can fees fully offset impermanent loss?
Yes, fees can offset or even exceed the loss if trading volume is high enough. This calculator shows break-even fees and fee coverage so you can judge whether the strategy still makes sense.
4. Does this tool assume a specific pool design?
Yes. It assumes a standard 50/50 constant product pool. Concentrated liquidity, weighted pools, or stable swap designs behave differently and need different formulas for accurate analysis.
5. Why enter prices for both tokens?
Using prices for both assets lets the calculator work even when neither side is a stablecoin. What matters most is the change in their price ratio, not just one token alone.
6. What does net difference versus hold mean?
It compares your final liquidity provider result against simply holding the original token amounts. A positive figure means fees and outcomes beat holding. A negative figure means holding performed better.
7. Should I include gas and exit costs?
Yes. Gas, bridge costs, swap costs, and withdrawal friction reduce realized performance. Adding them gives a more practical result, especially for smaller deposits or active repositioning.
8. Is impermanent loss always permanent?
Not necessarily. If the price ratio moves back toward the entry level, the loss can shrink. It becomes permanent when you actually remove liquidity and lock in the final token mix.