Impermanent Loss Calculator
What providing liquidity costs you against simply holding the two tokens, for any price change in either.
Where the loss comes from
A constant-product pool holds two tokens in equal value. When one rises, arbitrageurs buy it out of the pool until the price matches the market — so the pool ends up holding less of the asset that went up and more of the one that did not. You always end up rebalanced into the underperformer. That is impermanent loss: not a fee, not a hack, just the arithmetic of automated rebalancing against a moving price.
It is called impermanent because it disappears if the price ratio returns to where it started. It becomes permanent the moment you withdraw at a different ratio, which is what usually happens.
The numbers are worse than most people expect
A 2× move in one token against the other costs about 5.7%. A 4× move costs 20%. A 10× move costs roughly 42%. These are losses relative to having done nothing at all, and they apply regardless of whether both tokens went up — only the ratio between them matters.
Fees are the compensation. The calculator subtracts the two so you can see the net outcome: a pool paying 20% APR earns roughly 5% over ninety days, which covers a 2× divergence but not a 4× one. Advertised APRs on volatile pairs frequently fail to cover the divergence they are advertising for.
When providing liquidity makes sense
Stablecoin pairs and assets that track each other closely have minimal divergence, so almost all the fee income is kept. Volatile pairs need genuinely high and sustained fee income to be worth it. If you have a directional view on one of the two tokens, holding it outright is usually better than putting it in a pool that will systematically sell it as it rises.
Frequently asked questions
What is impermanent loss?
The difference between the value of tokens left in an automated market maker pool and the value of simply holding the same two tokens. It is caused by the pool rebalancing towards whichever asset performs worse.
At what point does it become permanent?
When you withdraw while the price ratio differs from your entry. If the ratio returns to its starting point before you exit, the loss disappears.
Do fees always cover it?
No. Fee income scales with trading volume, impermanent loss with price divergence. Stable pairs usually come out ahead; volatile pairs during a strong trend frequently do not.
Does it apply to concentrated liquidity?
Yes, and more sharply. Narrow ranges amplify both fee income and divergence loss, and once price leaves the range the position sits entirely in one asset.
Calculations run in your browser. Prices come from the same daily Binance closes that generate the signals on this site, refreshed every day after the 00:00 UTC close. Nothing here is financial advice.