Impermanent Loss Calculator

Enter the price ratio change between the two assets in your liquidity position and read back the impermanent loss as a percentage and as a dollar figure relative to your initial deposit.

Run it before you deposit into a Uniswap V2-style pool to see how much the position bleeds if one asset moves 2×, 5×, 10× against the other. Run it after the fact to check whether your fee earnings actually beat the loss you took on the divergence.

The formula assumes a constant-product AMM (x·y=k). Concentrated liquidity (Uniswap V3, others) amplifies impermanent loss within the chosen range — for those, the number this tool returns is a floor, not an exact figure.

The formula for a 50/50 constant-product pool (Uniswap V2, SushiSwap, classic Bancor): IL = 2·sqrt(price_ratio) / (1 + price_ratio) − 1. Where price_ratio is (current_price_A / initial_price_A) divided by (current_price_B / initial_price_B). Positive numerator divergence (one asset moves up relative to the other) produces a negative IL — the position has fewer dollars than just holding the same two assets unleveraged. The math is symmetric: a 4× move in either direction produces the same IL magnitude.

Worked example. You deposit 1 ETH and 3,000 USDC into a Uni V2 pool when ETH = $3,000. ETH moons to $6,000. Price ratio = 2. Plug into the formula: IL = 2·sqrt(2) / (1 + 2) − 1 = 2.828 / 3 − 1 = -0.0572, or -5.72%. Your LP position is worth about 5.72% less than if you'd just held the original 1 ETH and 3,000 USDC. In dollar terms: held = $6,000 + $3,000 = $9,000; LP = ~$8,485. The $515 difference is the impermanent loss. Whether it's actually a loss depends on whether the pool's fee earnings have made up for it.

The key word in "impermanent": if prices return to their initial ratio, the loss disappears. The pool ends up with the same composition you started with (rebalanced through swaps), and your share is intact. The "impermanent" framing is technically correct but practically misleading — over long horizons, prices rarely revert exactly. If you withdraw at any divergent ratio, the loss is realized.

Concentrated liquidity (Uniswap V3, derivatives) makes IL more aggressive within the chosen range and amplifies any out-of-range divergence. The constant-product formula is a floor, not the actual outcome, for V3 LPs. Concentrated positions are essentially leveraged versions of the V2 LP; they earn more fees per dollar of capital when price stays in range, and lose more when it doesn't. For an exact V3 IL you need the active range, the time-weighted price path, and the fee accumulation — much more involved than the V2 closed form.