Impermanent Loss Calculator for 50/50 Liquidity Pools
Estimate impermanent loss in a 50/50 liquidity pool. Enter each token’s price change and any fees earned to compare your LP position with simply holding.
| Price ratio change (r) | Example | Impermanent loss |
|---|
The loss is the same when the ratio moves the other way: r = 0.5 gives the same result as r = 2.
How to use this calculator
- Deposit: enter the dollar value you add to the pool. A 50/50 pool takes half in each token.
- Price changes: enter each token’s percentage change since you deposited. Use 100 for a doubling, −50 for a halving and 0 for a stablecoin that holds its peg.
- Fees earned: optionally enter the trading fees your position earned over the same period, as a percentage of the position.
The results compare three values: holding the two tokens (HODL), the LP position, and the LP position with fees. The line under the results shows how much in fees would be needed to match holding, and the reference table shows the loss for common price moves. For a slower walk-through, see how to calculate impermanent loss, step by step.
How it’s calculated
r = (1 + a) ÷ (1 + b) IL = 2 × √r ÷ (1 + r) − 1 HODL = D ÷ 2 × (1 + a) + D ÷ 2 × (1 + b) LP = HODL × (1 + IL) LP with fees = LP × (1 + f) Difference = LP with fees − HODL Break-even fees = −IL ÷ (1 + IL)
- a and b are the price changes of token A and token B as decimals (+100% = 1).
- r is the price ratio change: how far A moved relative to B.
- IL is the impermanent loss, the LP value relative to holding.
- D is the deposit in dollars, and f is the fees earned as a decimal.
- HODL is what the two original token amounts would be worth if simply held.
In a constant-product pool, the product of the two token balances stays fixed as people trade, before fees are added. When one token’s market price rises, traders buy it from the pool until the pool price matches, so the pool ends up holding less of the winner and more of the other token. Only the ratio matters, and the loss is the same whichever direction it moves: r = 0.5 gives the same result as r = 2.
Worked example
Suppose you deposit a hypothetical $10,000 into a Token A / stablecoin pool, $5,000 on each side. Token A then doubles (+100%) and the stablecoin stays at 0%.
- r = (1 + 1) ÷ (1 + 0) = 2
- IL = 2 × √2 ÷ 3 − 1 = −5.72%
- HODL = 5,000 × 2 + 5,000 × 1 = $15,000.00
- LP = 15,000 × 0.942809 = $14,142.14
- Difference = 14,142.14 − 15,000 = −$857.86
To break even, fees would need to add 0.057191 ÷ 0.942809 = 6.07% to the position. With 3% in fees, the LP position is worth $14,566.40, still $433.60 behind holding. With 7%, it reaches $15,132.09, or $132.09 ahead.
| Price ratio change (r) | Impermanent loss |
|---|---|
| 1.25× | −0.62% |
| 1.5× | −2.02% |
| 2× | −5.72% |
| 3× | −13.40% |
| 5× | −25.46% |
Warning: The LP position can be up in dollars and still trail holding. Here it grew from $10,000 to $14,142.14, yet holding would have produced $15,000. Measuring both against the same starting point is the core of calculating crypto profit and loss.
Limitations
- It covers 50/50 constant-product pools only. Weighted pools, stable-swap pools and concentrated-liquidity positions follow different math, so these results do not apply to them.
- Fees are entered as a single percentage on the final position. In practice they build up over time and depend on trading volume, which is one reason pool yields vary so much.
- The loss becomes permanent when you withdraw at a changed ratio. It only fades if prices return to their original ratio.
- Gas costs, extra reward tokens and smart-contract risk are not included.
- Large losses are hard to recover from, because percentage gains and losses are not symmetric.
Frequently asked questions
What is impermanent loss?
Impermanent loss is the gap between the value of a liquidity pool position and what the same two tokens would be worth if you had simply held them. It appears whenever the two prices move relative to each other, because trading rebalances the pool toward the token that became relatively cheaper. In a 50/50 pool, a doubling of one price relative to the other means a 5.72% shortfall versus holding.
Why is it called impermanent?
Because the shortfall shrinks if the two prices return to the ratio they had when you deposited. If the ratio comes all the way back, the loss disappears and you keep any fees earned. If you withdraw while the ratio is still different, the loss is locked in at that level. The name describes the possibility of reversal, not a guarantee of it.
Does impermanent loss happen if both tokens go up?
Only if they go up by different amounts. The loss depends on the ratio between the two prices, not on the direction of the market. If both tokens rise 50%, the ratio stays at 1 and there is no impermanent loss. If one rises 100% and the other 50%, the ratio is about 1.33 and the loss is about 1.03% compared with holding.
How much in fees is needed to offset impermanent loss?
Divide the loss by what is left after it: break-even fees = −IL ÷ (1 + IL). For a 5.72% impermanent loss, that is 6.07% of the position. The calculator shows this figure under the results. Whether a pool actually earns that much depends on its trading volume and fee rate, which change over time and are never guaranteed.
Related guides
Sources
- Understanding Returns (Uniswap v2 concepts) — Uniswap Docs
This content is for education only and is not financial, investment, tax or legal advice. Crypto assets are volatile and you can lose money. Examples use hypothetical numbers. See our disclaimer and editorial policy.