Impermanent Loss & LP Risk Calculator
Impermanent Loss Calculator
Calculate impermanent loss for DeFi liquidity pools — compare HODL vs LP strategies
How to Use Impermanent Loss Calculator: DeFi LP Risk Analyzer
Three quick steps to quantify your DeFi LP exposure.
Input the starting price of each asset in your liquidity pair to set the baseline value.
Add the expected or current price after a change to model pool rebalancing outcomes.
View side-by-side results showing impermanent loss percentage, pool value, and HODL performance.
Why Use Impermanent Loss Calculator: DeFi LP Risk Analyzer?
Quantify risk before committing capital to a liquidity pool.
Uses the constant product formula (x*y=k) to calculate impermanent loss across any price ratio.
Shows LP value versus HODL value in one view so the exact opportunity cost is visible.
Test any price change percentage to stress-test positions against volatile market moves.
Practical Examples of Impermanent Loss Calculator: DeFi LP Risk Analyzer
Real-world scenarios where this tool is used.
An LP deposited 1 ETH and 2000 USDC. After ETH doubles, see how much value is lost to IL versus simply holding both tokens.
A USDC/USDT pool where one stablecoin drops 2%. Calculate the impermanent loss exposure during low-volatility events.
An LP on a long-tail token pair experiences a 70% drop. Model the divergence loss before exiting the position.
Frequently Asked Questions
Explore comprehensive answers, mathematical formulas, and helpful guidance for calculating your results.
What price change ratio makes LP returns worse than simply HODLing?
Any price divergence between pooled assets creates impermanent loss. The loss grows as the price ratio deviates from 1:1, with a 2x move causing roughly 5.7% IL and a 5x move causing about 25.5% IL.
Does the calculator account for trading fees offsetting impermanent loss?
The base IL output excludes fee income. You can add expected fee APR and reward emissions to determine the breakeven point where LP yield surpasses HODL returns.
How is impermanent loss calculated for pools with more than two tokens?
Multi-asset pools use a generalized formula that weighs each token price change against its allocation. Each asset's contribution is calculated separately, then summed for the total IL.
Why does a loss appear even when the pool total value increases?
Impermanent loss is relative to holding, not absolute returns. The pool rebalances by selling the winner and buying the loser, leaving you with less of the appreciating asset than HODLing would.