Impermanent Loss Calculator
Compare providing liquidity against simply holding the two tokens.
Is the pool yield enough?
The advertised APR is only worth taking if it clears the break-even line. At this price move over 90 days, a pool has to pay 34.79 % just to leave you where holding would have.
The 20.00 % fee APR falls 14.79 % short of break-even.
How it works
Impermanent loss is not a fee or a bug — it is the arithmetic of a constant-product pool. As the two token prices diverge, arbitrageurs rebalance your share toward whichever asset fell, so you end up holding more of the loser and less of the winner than if you had simply held.
It depends only on the ratio between the two price changes, never on their direction: both doubling costs you nothing, one doubling while the other stands still costs about 5.7%. The loss becomes permanent the moment you withdraw, which is why the honest question is always whether accumulated fees outrun it.
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How the Impermanent Loss Calculator works
An impermanent loss calculator compares two outcomes: providing liquidity to an AMM pool versus simply holding the same two tokens. The gap between them is impermanent loss, and this tool shows whether the fees you earn are large enough to cover it.
Where the loss comes from
A constant-product pool must keep the value of both sides equal. When one token's price rises, arbitrageurs buy it out of the pool until the pool price matches the market — which means your share ends up holding less of the winner and more of the loser than when you deposited.
Nothing has been stolen and no fee has been charged. It is the mechanical cost of running an automated market maker: you are continuously selling into strength and buying into weakness, and you are compensated for that service in trading fees.
It depends on the ratio, not the direction
Impermanent loss is a function of how far the two prices diverge, and nothing else. If both tokens double, there is no loss at all — the ratio is unchanged. If one doubles while the other stands still, the loss is about 5.7%. A 4× divergence costs roughly 20%, and a 10× divergence about 42%.
This is why stablecoin pairs carry almost no impermanent loss and why a volatile token paired against a stablecoin carries a great deal. It is also why the loss is called impermanent: if prices return to their original ratio, it disappears entirely. It becomes permanent at the moment you withdraw.
The only question that matters
Fees versus divergence. A pool paying 20% APR earns roughly 5% over a quarter, which comfortably covers the 5.7% cost of one token doubling only if that doubling took most of the quarter to happen. A pool paying 5% APR on a pair that moves 4× apart is a straightforward loss against holding.
Enter your realistic fee APR and holding period alongside the price moves you actually expect. The net figure — impermanent loss plus fees earned — is the honest answer, and it is frequently negative for volatile pairs.
Reading a liquidity pool's yield
This doubles as a liquidity pool calculator, because an LP yield that is quoted on its own cannot be judged. The panel under the main result turns the pool's APR into three numbers: the fees actually earned over your holding period, the net result as a share of what holding would have been worth, and the break-even fee APR — the yield the pool must pay for the position merely to match holding.
The break-even figure is the one to lead with. It converts a price move into the language the pool advertises in, so a quoted 40% APR stops being an abstract number and becomes either comfortably above the line or plainly below it. It also rises sharply as the holding period shortens: the same divergence has to be earned back in less time, which is why a pool entered for two weeks needs a far higher headline rate than the same pool held for a year.
Why a high APR often is not a high yield
Pool APRs are advertised as annualised figures extrapolated from recent volume, and volume is highest precisely when prices are moving — which is when divergence is doing the most damage. The two are not independent, so the pools quoting the largest numbers are frequently the ones with the largest break-even to clear.
Two further deductions sit between the quote and your wallet. Reward emissions in a protocol's own token are only worth their sale price, and a farm paying in a token that falls faster than it pays is a yield on paper. And gas costs for entering, harvesting and exiting come off the top — on a small position, they alone can exceed a quarter's fees. Convert whatever is left to a comparable basis with the APR/APY converter before setting it against the break-even line here.
FAQ
How do I avoid impermanent loss entirely?
Provide liquidity only to pairs that move together — two stablecoins, or two liquid staking derivatives of the same asset. The fees are lower, but so is the divergence, and the net result is often better than a high-APR volatile pool.
Does this apply to Uniswap v3 concentrated liquidity?
The direction is the same but the magnitude is larger. Concentrating liquidity in a narrow range multiplies both your fee income and your impermanent loss, and once price leaves your range you hold 100% of one token and earn nothing. Treat the figure here as a conservative floor for a v3 position.
Is impermanent loss ever actually good?
It is never good on its own — it is always a cost relative to holding. What can be good is the package: fees minus impermanent loss. Judge the pool on the net, never on the APR alone.
How do I calculate liquidity pool yield?
Take the pool's fee APR, prorate it over the days you actually hold — that is the fee yield — and then subtract the impermanent loss for the price move over the same period. The calculator does both and also reports the break-even fee APR, which is the quickest way to judge a quoted yield: above the line the pool beat holding, below it the pool lost to holding.
What is a good APR for a liquidity pool?
There is no threshold that holds across pairs, because the number it has to beat depends on divergence. A 6% APR is generous for a stablecoin pair that barely diverges and derisory for a volatile pair that needs 30% to break even. Compare each pool against its own break-even figure rather than against other pools.
Should I provide liquidity or just stake?
They pay for different things and carry different risks. A pool pays trading fees and charges you impermanent loss when the two assets diverge. Staking pays for securing the chain, and its costs are lock-up, unbonding and issuance rather than divergence. Compare the two on net yield after those costs, not on the advertised rates.