Impermanent Loss Calculator
Calculate impermanent loss from providing liquidity to cryptocurrency AMM pools
About this calculator
The Impermanent Loss Calculator helps cryptocurrency liquidity providers estimate potential losses when token prices change in automated market maker (AMM) pools. When you provide liquidity to pools like Uniswap or PancakeSwap, price fluctuations between paired tokens can result in impermanent loss - the difference between holding tokens versus providing liquidity. This calculator quantifies that risk, enabling informed decisions about liquidity provision strategies and helping maximize DeFi yields while understanding associated costs.
How to use
Enter the initial prices of both tokens in your liquidity pair, then input the current or projected future prices. The calculator will instantly compute your impermanent loss percentage and dollar amount. Compare this against any trading fees earned to determine if liquidity provision remains profitable for your specific situation.
Frequently asked questions
What is impermanent loss in DeFi?
Impermanent loss occurs when providing liquidity to AMM pools and token prices diverge, resulting in fewer tokens than simply holding them separately.
When is impermanent loss highest?
Impermanent loss increases as price ratios between paired tokens diverge more. The loss is highest when one token significantly outperforms the other.
Can trading fees offset impermanent loss?
Yes, trading fees from liquidity pools can compensate for impermanent loss, especially in high-volume pools with substantial fee generation over time.