Impermanent Loss Calculator
Calculate potential impermanent loss before providing liquidity to any AMM pool.
IL vs Price Change
Price ratio (current / initial). IL is symmetric - a 2x increase and a 0.5x decrease produce the same IL.
Quick Reference
| Price change | IL |
|---|---|
| 1.25x (25.00%) | -0.62% |
| 1.5x (50.00%) | -2.02% |
| 2x (100.00%) | -5.72% |
| 3x (200.00%) | -13.40% |
| 4x (300.00%) | -20.00% |
| 5x (400.00%) | -25.46% |
What Is Impermanent Loss?
Impermanent loss is the difference in value between holding tokens in a liquidity pool and holding them in your wallet. It occurs whenever the price ratio of the two tokens in a pool changes from the ratio at the time of your deposit. The larger the price divergence, the greater the loss. IL affects liquidity providers on AMM-based DEXes across every chain, including pools on MegaETH and Hyperliquid's HyperEVM.
The term "impermanent" is misleading. The loss becomes permanent the moment you withdraw your liquidity. While you remain in the pool, the loss fluctuates as prices move. If the price ratio returns to exactly where it was when you deposited, the impermanent loss drops to zero. In practice, this rarely happens.
How the Math Works
Standard AMM pools (Uniswap V2 style) use the constant product formula: x * y = k. When one token's price increases relative to the other, arbitrageurs rebalance the pool by adding the cheaper token and removing the more expensive one. This rebalancing is what creates impermanent loss.
The formula for impermanent loss at a given price ratio r is: IL = (2 * sqrt(r)) / (1 + r) - 1. This means IL depends only on the magnitude of price change, not the direction. A 2x price increase produces the same IL as a 50% price decrease.
IL at Common Price Changes
A 1.25x price change (25% up or 20% down) results in approximately 0.6% IL. A 1.5x change produces 2.0% IL. At 2x, IL reaches 5.7%. At 3x, it hits 13.4%. At 5x, the loss climbs to 25.5%. These numbers apply to standard 50/50 constant product pools.
When Providing Liquidity Is Still Profitable
Impermanent loss is only one side of the equation. Liquidity providers also earn trading fees on every swap that routes through their pool. If the accumulated fees exceed the impermanent loss, the position is net profitable. High-volume pools on major pairs (ETH/USDC on Uniswap, for example) often generate enough fees to offset moderate IL. Yield strategies on protocols like Cap Labs on MegaETH use different mechanisms that avoid IL entirely.
The decision comes down to expected fee revenue versus expected price divergence. Pools with stable pairs (USDC/USDT) have near-zero IL but also lower fees. Pools with volatile pairs have higher IL risk but potentially higher fee revenue. Many protocols also offer liquidity mining rewards that further offset IL.
Concentrated Liquidity and IL
Concentrated liquidity pools (Uniswap V3 style) amplify both fee revenue and impermanent loss. By concentrating liquidity in a narrow price range, LPs earn more fees per dollar of capital when the price stays in range. If the price moves out of range, the position becomes 100% concentrated in the less valuable token. This calculator models standard 50/50 pools. Concentrated liquidity IL depends on the specific price range chosen.
Practical Tips for Managing IL
- Provide liquidity to pairs where you are comfortable holding both tokens regardless of price movement.
- Stablecoin pairs (USDC/DAI, USDC/USDT) have minimal IL since both tokens track $1.
- Check the pool's historical fee APY relative to price volatility before depositing.
- Monitor your position regularly. If price divergence is large and fees are not compensating, consider withdrawing.
- Factor in gas costs for deposit and withdrawal. On Ethereum mainnet, gas can significantly reduce net returns for smaller positions.
IL Across Different DEX Models
Standard AMMs (Uniswap V2, SushiSwap) follow the constant product formula exactly. The IL percentages in this calculator apply directly. Concentrated liquidity AMMs (Uniswap V3, Maverick) have variable IL depending on the position's price range. Order book exchanges like Hyperliquid and GTE on MegaETH do not have impermanent loss because they do not use liquidity pools. Market makers on order books face different risks (inventory risk, adverse selection) but not IL.
Weighted pools (Balancer) allow non-50/50 ratios like 80/20 or 95/5. The higher the weight of one token, the lower the IL from that token's price movement. An 80/20 ETH/USDC pool has lower IL than a 50/50 pool for the same ETH price change, but also earns proportionally less in fees from ETH-side swaps.