Crypto Impermanent Loss Calculator
Calculate crypto impermanent loss for Uniswap, SushiSwap and PancakeSwap AMM liquidity pools.
What is Impermanent Loss?
Impermanent Loss (IL) is a phenomenon unique to liquidity providers in Automated Market Makers (AMMs) like Uniswap or PancakeSwap. It occurs when the price ratio of the two deposited tokens changes after you provide liquidity, compared to the ratio when you deposited them. Because the AMM rebalances your holdings to keep the pool value balanced, you end up with more of the asset that has decreased in value and less of the asset that has increased in value.
This "loss" is termed "impermanent" because if the token prices return to their original ratio, the loss vanishes. However, if you withdraw your liquidity while the price divergence exists, the loss becomes permanent. Essentially, by participating in a liquidity pool, you are betting that the trading fees earned over time will outweigh the potential negative impact of this price divergence. Using this calculator helps you quantify that risk by comparing your current LP position against a simple "HODL" strategy.
In volatile markets, IL can significantly erode your returns. Always weigh your expected trading fee income against the price volatility of the pair you are staking.
How to Calculate Crypto Impermanent Loss
The Impermanent Loss Calculator helps DeFi liquidity providers evaluate the risks of staking assets in Automated Market Makers (AMMs) like Uniswap, SushiSwap, or PancakeSwap. Impermanent loss occurs when the price ratio of your deposited tokens changes compared to when you deposited them. This calculator uses the constant product formula (x * y = k) to predict exactly how much value you might lose relative to simply holding the assets in your wallet.
By entering your initial investment and simulating future price scenarios for both Token A and Token B, you can clearly visualize the "Hold Value" versus the "LP Value." This is essential for risk management, allowing you to determine if the trading fees you expect to earn from the liquidity pool will be enough to offset the potential impermanent loss caused by price volatility.
Impermanent loss is calculated by comparing the LP value against a simple hold strategy. The formula relies on the change in price ratio (r): IL = (2 × √r) / (1 + r) − 1, where r = (P_A_future / P_B_future) / (P_A_initial / P_B_initial). Hold value (simply holding): Hold Value = Token A Held × Future Price A + Token B Held × Future Price B. LP value after IL: LP Value = Hold Value × (1 + IL). Dollar loss: IL Amount = Hold Value − LP Value.
Before providing liquidity, compare your risks with the staking APY calculator to see if active yield farming is more profitable than simple staking, or explore stablecoin lending yields for lower-risk DeFi returns.
Understand Impermanent Loss Deeply
Learn what impermanent loss really is, how the constant product formula works, and see a quick reference table for any price scenario.
Read Full Guide →Impermanent Loss Calculator — FAQ
What is Impermanent Loss (IL)?
Impermanent Loss is the hidden, mathematically inevitable risk incurred when providing liquidity to an Automated Market Maker (AMM) like Uniswap. It strictly measures the difference in total portfolio value between depositing your assets into a complex liquidity pool versus simply holding those exact same assets untouched in your cold wallet during a period of massive price volatility.
Why is it called 'impermanent'?
The loss is technically classified as 'impermanent' because if the volatile asset's price magically returns exactly to the precise ratio it was at the very moment you deposited your liquidity, the mathematical loss is completely erased. However, if you panic and withdraw your liquidity while the prices are heavily skewed, that theoretical loss instantly becomes permanently realized.
How do liquidity pools cause this loss?
AMMs rely on a rigid constant product formula (x * y = k) to balance assets. If Token A aggressively pumps in value on external markets, arbitrage bots will relentlessly drain Token A from your specific pool and dump cheaper Token B into it to force the pool's ratio back into equilibrium. You are left holding significantly more of the depreciating asset.
Can trading fees offset impermanent loss?
Yes, this is the entire financial premise of yield farming. Whenever users swap tokens through your pool, you earn a percentage of the strict trading fees (usually 0.3%). If the market is relatively stable and volume is massive, your accumulated fee revenue will far exceed any minor impermanent loss. In highly volatile pairs, however, IL often obliterates fee profits.
Which liquidity pools are the safest?
The absolute safest liquidity pools pair mathematically identical assets, drastically neutralizing price divergence. Stablecoin pairs (e.g., USDC/USDT) or liquid staking pairs (e.g., ETH/stETH) experience virtually zero price divergence, completely eliminating impermanent loss risk. Pairing a micro-cap, highly volatile meme coin with Ethereum represents the highest possible risk of devastating impermanent loss.