Impermanent Loss Calculator

The loss is impermanent only in the sense that it exists purely as a function of the CURRENT price ratio between the pool's two assets relative to when you deposited -- if that ratio moves back to where it started, the gap between Hold Value and Pool Value returns to zero, even without withdrawing. It becomes a permanent, realized loss the moment you withdraw your liquidity at a price ratio different from your deposit ratio. Many liquidity providers who withdrew during a price swing without waiting for reversion have experienced very real, permanent losses despite the name.

No. Impermanent Loss and Impermanent Loss % are calculated purely from the price movement and pool mechanics -- Hold Value minus Pool Value -- independent of any fees. Trading Fees Earned only factors into the separate Net Gain/Loss (with Fees) figure, which adds fee income back to your pool position to show your actual bottom line including trading revenue. A position can show a meaningful Impermanent Loss but still be profitable overall if fees earned outweigh it.

It comes from the constant-product formula (x * y = k) that AMMs like Uniswap use to price trades: for a pool weighted equally between two assets, the pool's value as the price ratio moves works out mathematically to the initial value times the square root of that price ratio. A pool weighted differently between its two assets (like an 80/20 pool) generalizes this to the price ratio raised to the pool's weight instead of a fixed square root.

Impermanent loss occurs whenever the price ratio moves away from where it was at deposit, in either direction -- a token price doubling and a token price halving both produce impermanent loss relative to holding, because the AMM rebalances the pool either way. The magnitude, not the direction, drives how large the loss is; larger price swings (in percentage terms) in either direction produce larger impermanent loss.

It models a single price-change scenario at a single deposit-to-current snapshot, not a continuous path of prices over time (which affects how much fee income actually accrues), doesn't account for token emissions or liquidity mining rewards some pools offer on top of trading fees, and doesn't model gas costs for entering or exiting the position. Treat this as a simplified illustration of the mechanics, not a precise forecast of your actual returns.