DeFi liquidity & Web3 · No account required
Impermanent Loss Calculator
Model a full-range 50/50 constant-product pool from two manual prices. Compare the LP token quantities and marked value with simply holding the starting pair, then add your own fee and reward figures. Not for concentrated-liquidity ranges.
How it works & assumptions02 Read the result with its limits
- Hold value
- LP value before entered flows
- LP minus hold before flows
- LP minus hold after entered flows
| Asset | Starting / held quantity | Modelled LP quantity |
|---|---|---|
- Entered fees + incentives
- Entered other costs
- LP value after entered flows
- More income needed to match hold
IL = 2√r ÷ (1 + r) − 1r is Token A's price change divided by Token B's price change. Values are approximate and assume arbitrage aligns a full-range 50/50 constant-product pool with the entered relative price.
Full-range 50/50 constant-product pools only. Concentrated ranges, weighted pools, stable-swap curves, changing pool share, price impact, uncollected fee mechanics and tax are excluded. Educational calculation, not financial advice.
This calculator models one specific pool shape
The worksheet compares holding two tokens with supplying the same starting value to a full-range, equally valued, constant-product pool. It is similar to the basic reserve model associated with Uniswap v2. It is not a Uniswap position reader and it does not model concentrated ranges, weighted pools, stable-swap curves or changes in your share of the pool.
Uniswap’s v2 pool documentation explains that providers add the two pool tokens in the current proportion and receive liquidity tokens representing their contribution. The calculator begins with equal market value in Token A and Token B, then assumes arbitrage has aligned the pool with the relative price change you enter.
Impermanent loss is measured against holding
Let a be Token A’s comparison price divided by its starting price and b be the same ratio for Token B. The relative price ratio is r = a ÷ b. Under the stated full-range 50/50 assumptions:
Impermanent loss percentage = 2√r ÷ (1 + r) − 1
Hold value = starting value × (a + b) ÷ 2
LP value before entered income = starting value × √(a × b)
If both prices change by the same proportion, r remains 1 and this relative loss is zero. That does not mean the marked portfolio made money: both tokens may have fallen together. The benchmark is holding the same starting quantities, not cash.
Worked example: ETH rises while the quote token stays flat
Start with a hypothetical 10,000 USD pair: 5,000 USD of ETH at 2,000 USD and 5,000 USDC at 1 USD. The starting quantities are 2.5 ETH and 5,000 USDC. If ETH is later entered at 3,000 USD while USDC remains at 1 USD, holding is marked at 12,500 USD.
The full-range constant-product model produces about 2.041241 ETH and 6,123.724357 USDC, worth about 12,247.45 USD in total. The difference from holding is about −252.55 USD, or −2.02041%. Those values exclude fees, incentives and costs until you enter them separately.
Fees can offset the difference, but are not the formula
Liquidity providers may earn trading fees. Uniswap’s liquidity overview describes LP fee income as proportional to liquidity share and notes that fee earnings vary with trading. External token incentives are a different cash flow. The calculator adds the marked values you enter; it does not infer whether they are claimable, liquid or denominated accurately.
“More income needed to match hold” is the remaining difference after entered fees, incentives and costs. A zero result means the entered figures meet or exceed this hold benchmark within the model. It is not a break-even price, projected APR or proof that the position outperformed after tax and execution costs.
Do not use this formula for a chosen price range
Concentrated liquidity behaves differently. When its current price moves beyond a selected range, a position can become single-sided and stop earning fees. That is why this tool rejects any implication that it can reproduce v3/v4 range accounting. Read in-range vs out-of-range liquidity before comparing such a position.
For return analysis, keep trading fees and token incentives separate. A result based on manually entered prices is an educational scenario, not a live pool valuation or financial advice.