Impermanent Loss Calculator
Calculate the impermanent loss from providing liquidity in a DeFi pool. Compare what you'd have if you just held versus providing liquidity.
What is impermanent loss?
Impermanent loss (IL) occurs when you provide liquidity to an automated market maker (AMM) like Uniswap or SushiSwap, and the price of the deposited tokens changes relative to when you deposited them. The bigger the price change, the larger the loss.
It's called "impermanent" because the loss only becomes permanent (or "realised") when you withdraw your liquidity. If the price returns to the original ratio, the loss disappears. However, in practice, prices rarely return to exactly the same point.
How the formula works
For a standard 50/50 liquidity pool with a stablecoin pair, the formula is:
IL = 2 × sqrt(priceRatio) / (1 + priceRatio) - 1
Where priceRatio = new price / original price of the volatile token. The result is always negative (or zero), representing the percentage loss compared to simply holding.
Should you still provide liquidity?
Impermanent loss is only one side of the equation. LP positions also earn trading fees (and sometimes farming rewards). If the fees earned exceed the impermanent loss, you still come out ahead. Use this calculator to understand the IL risk, then factor in the pool's APR to make an informed decision.
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