Impermanent Loss Calculator

How to Use the Impermanent Loss Calculator

The impermanent loss calculator helps you estimate how a change in the price of one token relative to the other affects the value of your liquidity pool share. The tool runs in your browser and does not send data to a server, so you can test different scenarios privately.

In the first field, enter the value of your pool contribution in dollars, such as $1,000. In the second field, enter the change in token price relative to the other as a multiplier: 2 means the price doubled relative to the other, 0.5 means it fell by half, and 1 means no change. After you enter the data, you will see:

• impermanent loss versus holding the tokens,
• the value if you held the tokens, or HODL,
• the value in the pool excluding fees,
• the difference between those values.

You can change the numbers and compare scenarios right away. Treat the result as a starting point for further analysis, not as a forecast of future prices.

What Is Impermanent Loss and the IL = 2 × sqrt(k) ÷ (1 + k) - 1 Formula

Impermanent loss is the difference between what you would have if you held the tokens in your wallet in the initial 50/50 split and what your pool shares would be worth after the price of one token changes relative to the other. It is called impermanent because if the price relationship returns to its starting level, the loss may disappear. In practice, pool fees can reduce or offset it, but they depend on the platform and are not part of this calculator.

For a positive multiplier k, the impermanent loss formula is: IL = 2 × sqrt(k) ÷ (1 + k) - 1. You calculate the HODL value as half of the contribution multiplied by 1 + k. The pool value excluding fees is the contribution multiplied by sqrt(k). The difference is the pool value minus the HODL value.

This example shows a situation where the price of one token doubled relative to the other. The pool value is lower than holding the tokens, even though the pool itself gained value.

HODL vs Pool Value Interpretation

HODL means the scenario where you do not deposit tokens into the pool and instead hold them in your wallet in the initial 50/50 split. Pool value is the value of your share after the price change, but without adding fees. Comparing these two numbers shows whether a given price move works in your favor or not.

When the impermanent loss result is negative, the pool value is lower than HODL. If the result were positive, the pool would be worth more than holding the tokens. In a typical scenario of a strong increase or decrease in one token, the result is negative because the pool automatically rebalances. The difference value tells you how many dollars separate the two options at that moment.

For the default inputs: a $1,000 contribution and a doubling of one token's price relative to the other give a HODL value of $1,500.00, a pool value excluding fees of $1,414.21, and a difference of −$85.79. The impermanent loss is -5.72%. This means that under these assumptions, the pool is worth 5.72% less than holding the tokens.

Keep in mind that HODL is also a simplification. It assumes no additional buys, sells, or portfolio changes. The calculator compares only two options at a selected moment.

How Token Price Change Affects the Result

The change in token price relative to the other is the key input in the impermanent loss calculator. A multiplier of 1 means no change in the price relationship and usually no impermanent loss. A multiplier greater than 1 means one token gained relative to the other. A multiplier less than 1 means one token lost relative to the other.

The larger the deviation from 1, the larger the potential impermanent loss. The formula works symmetrically for increases and decreases: doubling the price of one token relative to the other and a decrease by half produce the same absolute result, though in a different arrangement. That is because what matters is the relationship between the tokens, not only the direction one of them moves.

It is worth testing several scenarios: a small change, a moderate change, and a large change. This shows you when the difference versus HODL is small and when it becomes significant. The result still does not include fees, so before deciding, compare it with the current terms of your platform.

Limitations: 50/50 Pool Assumption, No Fees or Transaction Costs

The calculator uses a simplified 50/50 pool model. It assumes you initially deposit two tokens of equal value and then track only the change in their price relative to each other. It does not account for deposits and withdrawals during the period, changes in pool share, price-range strategies, or other mechanisms that platforms may offer.

The tool does not add platform fees, transaction costs, taxes, commissions, or differences between networks. It also does not include current exchange rates or prices. The pool value shown excludes fees, so the actual result may differ if fees are charged. Check the current fee schedule and terms of the platform you use.

The result is a rough guide when you want to quickly compare scenarios or see how a price change affects the relationship between HODL and pool value. It is not a forecast or investment recommendation. It is not intended for tax calculations or for evaluating a specific platform. It is most useful as part of a broader analysis, together with fees, holding time, and your own strategy.

Frequently Asked Questions

This calculator gives a theoretical impermanent loss for a classic 50/50 pool and does not include fees or the terms of any specific platform. Before investing, check the pool parameters.