Impermanent Loss Calculator

Impermanent loss is the difference in value between holding two tokens in a liquidity pool and simply holding the same two tokens in your wallet. When you provide liquidity to a decentralized exchange like Uniswap, Curve, or Balancer, you deposit a pair of assets. If their prices move apart, the pool ends up holding more of the weaker asset and less of the stronger one, and your share is worth less than if you had done nothing.

It is called impermanent because the gap only becomes real when you withdraw. If prices return to where they started, the loss disappears. If you exit while prices have diverged, the loss is locked in and becomes permanent.

This impermanent loss calculator models a 50/50 constant-product liquidity pool, the same design used by Uniswap v2 and most automated market makers. You enter the price change of your assets, and it shows the impermanent loss as a percentage, the value of your liquidity position, and what you would have had if you had simply held the tokens instead.

The goal is to make a hidden cost visible before you commit capital. Liquidity provision can be profitable, but only when fees and rewards outweigh the drag from price divergence. This tool isolates that drag so you can reason about it clearly.

A constant-product pool keeps the product of its two token reserves fixed. As one asset rises in price, arbitrage traders buy it out of the pool until the pool price matches the market, which mechanically rebalances your holdings. The math reduces to a clean formula that depends only on the price ratio between your two assets.

With r as the price ratio (how much one asset moved relative to the other), the impermanent loss is given by IL = 2 times the square root of r, divided by (1 plus r), minus 1. The result is always zero or negative, and it depends only on relative price movement, not on the dollar amounts you deposited.

• r is the new price ratio of the two assets divided by the original ratio
• If both assets move identically, r equals 1 and impermanent loss is zero
• The bigger the gap between the two assets, the more negative the result

A liquidity pool has no view on price. It only enforces its constant-product rule. When an asset pumps, arbitrageurs buy it cheaply from your pool and sell it elsewhere, draining the appreciating asset from your position. When an asset dumps, the pool absorbs it, leaving you holding more of the loser.

The net effect is that a liquidity provider is always selling the winner and buying the loser, the opposite of what a simple holder does. That structural behavior, not any single trade, is the source of impermanent loss.

Enter your initial position and the price change of each asset. The calculator returns three numbers that together tell the full story of your position.

• IL percent: how much value the pool mechanics cost you relative to holding
• LP value vs hold: the dollar value of your position next to the value of simply holding
• Dollar cost: the absolute amount the divergence subtracted from your position

Read the percentage to judge severity, and read the dollar cost to judge whether it actually matters at your position size. A 2 percent impermanent loss on a small position is noise. The same percentage on a large position can erase weeks of fee income.

Plotted against price divergence, impermanent loss forms a smooth curve that sits at zero when prices have not moved relative to each other and bends downward as they pull apart. It is symmetric, so a doubling of one asset and a halving of one asset produce the same loss.

The curve is gentle near the center and steepens as divergence grows. A 1.25x move costs only about 0.6 percent, a 2x move costs about 5.7 percent, and a 4x move costs about 20 percent. Small wiggles are cheap, but large trends are expensive.

Impermanent loss is only one side of the ledger. Every swap routed through your pool pays a fee, and that fee accrues to liquidity providers. Many pools also distribute incentive tokens on top. Your real outcome is fees plus rewards minus impermanent loss.

In high-volume, low-volatility pairs such as stablecoin pools on Curve, fees usually win and providing liquidity is profitable. In volatile pairs during a strong trend, divergence can outrun fee income. The question is never impermanent loss alone, it is whether your earnings cover it.

Uniswap v3 introduced concentrated liquidity, where you supply within a chosen price range instead of across the whole curve. This boosts fee earnings because your capital is more dense where trading happens, but it also amplifies impermanent loss for the same price move.

Within a tight range you behave like a much larger constant-product position, so divergence bites harder. When price exits your range entirely, you end up fully converted into one asset and stop earning fees until price returns. Uniswap impermanent loss in v3 is therefore higher and more abrupt than in v2 for the same divergence.

Two beliefs trip people up repeatedly, and both come from misreading the formula.

• Thinking impermanent loss only happens when an asset dumps. It happens on any divergence, including when one asset pumps hard
• Thinking a wider Uniswap v3 range removes impermanent loss. A wider range reduces the chance of going out of range and lowers fee density, but the loss from divergence still applies
• Confusing impermanent loss with total loss. You can have impermanent loss and still profit overall once fees are counted
• Assuming the loss is permanent the moment it appears. It only locks in when you withdraw

Suppose you deposit 1 ETH at 2,000 dollars and 2,000 USDC, a 4,000 dollar position split 50/50. ETH then rises to 4,000 dollars, so the price ratio r is 2.

Plugging into the formula, IL = 2 times the square root of 2, divided by 3, minus 1, which is about negative 5.7 percent. Your pool position is now worth roughly 5,657 dollars, while simply holding would have been worth 6,000 dollars. The impermanent loss is about 343 dollars, the cost of the pool selling your ETH on the way up. If the fees you earned over that period exceeded 343 dollars, you still came out ahead.

This calculator assumes a clean 50/50 constant-product pool and ignores some real-world frictions. Use the result as a strong estimate, not an exact settlement figure.

• Gas costs, deposit and withdrawal fees, and slippage are not included
• Weighted pools such as Balancer 80/20 follow a different curve and have different exposure
• Concentrated liquidity ranges need their own range-aware modeling
• Rebasing tokens, fee-on-transfer tokens, and oracle-based pools behave differently

A calculator tells you the cost of a price move you already know about. The harder problem is noticing when it happens. Otomato detects your liquidity positions automatically across 11 chains, including Ethereum, Base, Arbitrum, and HyperEVM, just from your wallet address, with no manual setup per protocol.

Once a position is detected, Otomato watches it continuously and alerts you when something material changes. For a Uniswap v3 position that means a heads up when price approaches or exits your range, and for any liquidity position it means flagging when divergence starts eating into your returns.

That turns impermanent loss from a number you check after the fact into a signal you receive in time to act. Paste a wallet at otomato.xyz and let your liquidity positions monitor themselves.