Impermanent Loss Calculator
Impermanent loss is the gap between holding tokens inside a constant-product automated market maker pool and simply holding them in a wallet. As the price ratio of the two pooled tokens diverges from your entry point, the pool rebalances against you, producing a loss that grows with the size of the divergence. This calculator takes the original and current prices of the two tokens (or a direct price ratio) and returns the impermanent loss as a percentage, the value if held versus pooled, and the dollar difference on your deposit.
Impermanent loss formula
Price ratio r = current ratio / entry ratio
Impermanent loss = (2 * sqrt(r) / (1 + r)) - 1
Loss is expressed as a percentage (negative value)
Dollar loss = initial deposit * absolute value of impermanent loss
The formula assumes a 50/50 constant-product pool (the x times y equals k design used by Uniswap v2 and similar AMMs). Impermanent loss is always zero or negative and depends only on the size of the price ratio change, not its direction.
Using the result
- A price ratio of 1 (no change) gives exactly zero impermanent loss.
- A 2x ratio gives about 5.7 percent; a 4x gives about 20 percent; a 5x gives about 25.5 percent.
- The loss is symmetric: a halving of the ratio (0.5x) gives the same loss as a doubling.
- Trading fees earned by the pool are not included and can offset the loss over time.
- Concentrated-liquidity and non-50/50 pools follow different formulas; this tool models the classic 50/50 design.
Impermanent loss: frequently asked questions
What is impermanent loss?
Impermanent loss is the difference in value between holding tokens in a constant-product automated market maker liquidity pool versus simply holding the same tokens in a wallet. It arises because the pool rebalances as prices move, leaving the liquidity provider with relatively more of the falling asset and less of the rising one.
How is impermanent loss calculated?
For a 50/50 constant-product pool, impermanent loss equals 2 times the square root of the price ratio, divided by 1 plus the price ratio, minus 1. The price ratio is the new price divided by the original price of one token relative to the other. The result is always zero or negative.
Why is it called impermanent?
The loss is unrealized while you remain in the pool: if the price ratio returns to where you entered, the loss disappears entirely. It becomes permanent only when you withdraw at a different price ratio than you deposited. Trading fees earned can offset or exceed the impermanent loss over time.
Does a 2x price change cause a big loss?
A token doubling in price (a price ratio of 2) against its pair causes about 5.7 percent impermanent loss in a 50/50 constant-product pool. A 4x change causes about 20 percent, and a 5x change about 25.5 percent. Larger divergences cause progressively bigger losses, regardless of direction.
Does this calculator include trading fees?
No. This tool computes the pure impermanent loss from the price ratio change only. The fees a pool earns are separate and can make liquidity provision profitable despite impermanent loss. Compare your expected fee yield against the impermanent loss shown here to judge the net outcome.
Official sources
- Ethereum.org: Decentralized finance and automated market makers.
- U.S. CFTC: Digital assets education center.
Reviewed by the CalculatorHub team, edited by James Graham, 17 June 2026. See our methodology.