Impermanent Loss Calculator

Dipprofit Impermanent Loss Calculator:

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An impermanent loss calculator is a digital tool used by crypto investors to estimate the potential losses they might face when providing liquidity to a Decentralized Exchange (DEX). Before learning how to use the Dipprofit Web3 Impermanent Loss Calculator, I will explain the meaning of impermanent loss.

What Impermanent Loss Actually Is

Impermanent loss is the difference between the value of your assets sitting inside a liquidity pool and the value those same assets would have had if you’d simply held them in your wallet. It happens because of how automated market makers work.

Take the classic setup: you deposit ETH and USDC into a Uniswap pool, 50/50 by value. The pool uses a constant product formula, x times y equals k, where x and y are the quantities of each token. As ETH’s price moves, arbitrageurs trade against the pool to bring its internal price back in line with the broader market. Every one of those arbitrage trades shifts your underlying token balance. If ETH goes up, the pool sells some of your ETH into USDC along the way. If ETH goes down, the pool buys ETH with your USDC. Either direction, you end up holding less of whatever asset performed better.

The loss is called “impermanent” because it only becomes real once you withdraw. If the price ratio returns to where it started before you pull your liquidity, the loss disappears. In practice, prices rarely snap back to your exact entry point, so for most LPs the loss is about as impermanent as a tattoo.

Here’s the math for a standard 50/50 constant-product pool, the same formula Uniswap V2 uses:

IL = [2 × √r / (1 + r)] − 1

where r is the ratio of the new price to your entry price.

Run a few numbers through that and the pattern becomes obvious. A 2x move in either direction produces a 5.72% loss relative to holding. A 4x move produces a 20% loss. A 5x move, the kind of pump that gets an altcoin trending, produces 25.46% impermanent loss. The bigger the price divergence, the sharper the curve bends against you, and the relationship is symmetric. It doesn’t matter if the asset mooned or dumped. Divergence itself is the enemy of a liquidity provider, not direction.

Why the Formula Changes by DEX (And Why This Matters More Than People Think)

Most impermanent loss calculators online use one formula and apply it to every pool on every exchange. That’s a mistake, and it’s the exact problem we set out to fix. Uniswap V2, Curve, Balancer, and Uniswap V3 don’t share the same mathematical foundation, so a tool that treats them identically will hand you a number that has no relationship to what you’d actually experience.

Constant product pools (Uniswap V2, SushiSwap Classic, PancakeSwap V2, Trader Joe V1, QuickSwap V2, Raydium’s standard AMM, and roughly a dozen others) use the formula above. Full price range, 50/50 weighting, straightforward math.

Concentrated liquidity pools (Uniswap V3 and V4, PancakeSwap V3, Orca’s Whirlpools, Camelot V3, Aerodrome Slipstream, Cetus on Sui) let you park your liquidity inside a specific price band instead of the full 0-to-infinity range. This is more capital-efficient, meaning you earn more fees per dollar deposited, but it comes at a cost: your impermanent loss inside that range is amplified relative to a full-range position. Go outside your chosen band and your position converts entirely into whichever single asset lost value, and it stops earning fees altogether until price comes back.

Weighted pools (Balancer, Beethoven X, Gyroscope) let you set a custom ratio instead of the fixed 50/50 split. An 80/20 pool, 80% ETH and 20% USDC, drastically reduces impermanent loss on the volatile side because you’re already holding most of your capital in the asset that’s expected to move. Run the numbers on a 5x price move: a standard 50/50 pool takes a 25.46% hit, while an 80/20-weighted pool absorbs closer to 3.9%. That’s not a small difference. That’s the difference between a bad quarter and a wipeout.

StableSwap pools (Curve Finance, Ellipsis, Synapse, Wombat, Saddle) are built specifically for assets that are supposed to trade near a 1:1 peg, like USDC/USDT or stETH/ETH. These use an amplification coefficient that flattens the pricing curve dramatically near the peg, which is why Curve pools can offer 3-5% APY with close to zero impermanent loss as long as the peg holds. The formula approximates IL as (ΔP)² divided by 8A, where A is the amplification parameter, typically set between 100 and 2000. This approximation is accurate specifically near the peg; if an asset depegs hard, as has happened before, the math shifts into different territory entirely.

Dynamic and PMM-based pools (Maverick Protocol’s Dynamic Distribution AMM, DODO’s Proactive Market Maker) auto-adjust their liquidity bins as price moves, which is a genuinely different mechanism from static concentrated liquidity. We approximate these using a narrow, auto-shifting range model, since the underlying rebalancing logic varies by protocol implementation.

How to Use the Dipprofit Impermanent Loss Calculator

The calculator runs in two modes, and each one solves a different question.

Mode 1: Impermanent Loss Simulator. This is where you model a specific position on a specific DEX. Here’s what each field means and what to put in it:

Decentralized Exchange: search and select your actual protocol. This single choice determines which formula the calculator applies behind the scenes, so it’s the most important input in the entire tool.
Token A Symbol / Token B Symbol: Token A is your volatile asset (ETH, BTC, SOL, whatever you’re providing), Token B is typically your stable or paired asset (USDC, USDT, DAI).
Token A Initial Price: the price of Token A, denominated in Token B, at the exact moment you deposited liquidity. If you added liquidity when ETH was $3,000, that’s your number.
Token A New/Projected Price: the price you want to simulate against, either a real current price if you’re checking an existing position, or a hypothetical future price if you’re stress-testing a decision before depositing.
Total Deposit Value (USD): the total dollar value of both tokens combined at the moment of deposit, split 50/50 (or according to your chosen weight, for weighted pools).
Concentrated Range fields (Min Price / Max Price): only shown for concentrated liquidity DEXs. These define the price band your liquidity is active in. Set them to match whatever range you actually chose, or plan to choose, on the real protocol.
Token A Weight (%): only shown for Balancer-style weighted pools. This is the percentage of your total deposit allocated to the volatile token. 80 means an 80/20 split.
Amplification (A): only shown for Curve-style StableSwap pools. Higher values mean a flatter, more peg-resistant curve. Check the actual pool’s parameters on Curve’s own interface if you want precision here, since different Curve pools use different A values.
Estimated Trading Fees Earned: an optional field that lets you see your net result once fee income is factored back in against the loss.

Once you run the simulation, the results panel shows your impermanent loss percentage, the dollar loss compared to holding, your current LP position value, what holding would have been worth, your net result after fees, and the exact token amounts your position now holds after the pool rebalanced. There’s a full breakdown table underneath showing every number that fed into the calculation, plus the breakeven fee percentage, meaning how much you’d need to earn in fees just to match what holding would have given you.

None of that means much without knowing exactly what each result is measuring and, more importantly, how the numbers relate to each other. So let’s run one consistent example through every field, using round numbers, so you can see exactly how the calculator gets from your inputs to what’s on the screen.

The setup: You deposit $10,000 into an ETH/USDC pool on a standard constant-product DEX (Uniswap V2-style) when ETH is $3,000. That $10,000 splits 50/50 at entry, so you’re putting in $5,000 worth of ETH (1.667 ETH) and $5,000 of USDC. Six months later, ETH has climbed to $6,000, a straight 2x. You’ve also earned $150 in trading fees along the way. Here’s what each result field shows, and why.

Impermanent Loss %

This is the core number the entire calculator exists to produce: the percentage difference between what your money is worth sitting in the pool right now versus what it would be worth if you’d never touched a pool and just held your original ETH and USDC in a wallet. Plug a 2x price ratio into the constant-product formula and you get −5.72%. That means your pooled position, purely from the mechanics of the AMM rebalancing your tokens as price moved, is worth 5.72% less than doing nothing at all would have been.

How to read it: this number is always zero or negative for a passive liquidity provider. It can never work in your favor, because impermanent loss is defined as underperformance relative to holding, not as a standalone gain or loss. A reading close to zero means the price barely moved since you deposited. A reading deep in double digits, like the −25.46% you’d see on a 5x move, means the two assets in your pool diverged hard, and the AMM has been aggressively rebalancing you out of your winning asset the entire way up.

Dollar Loss vs HODL

This takes the percentage above and converts it into an actual number of dollars, based on what your holding position would have been worth. Your HODL Value, worked out below, comes to $15,000. Apply the −5.72% impermanent loss to that figure and you get a Dollar Loss vs HODL of roughly −$858.

How to read it: this is the field to look at when you want to stop thinking in percentages and start thinking in money you can actually picture. A −5.72% reading sounds abstract. A −$858 reading on a $10,000 position is the kind of number that should factor directly into whether you think the pool’s fee income is going to be worth it.

HODL Value

This is your benchmark, and understanding how it’s built matters. Your original $10,000 splits into $5,000 of ETH (1.667 ETH at $3,000) and $5,000 of USDC. If you’d simply held both of those in a wallet and done nothing, six months later your 1.667 ETH would be worth $10,000 (since ETH doubled to $6,000) and your USDC would still be worth $5,000, because stablecoins don’t move. Add those together and your HODL Value is $15,000.

How to read it: every single impermanent loss calculation is fundamentally a comparison against this number. It answers one question and one question only: what would doing nothing have gotten you? Everything else the calculator produces is measured against this figure.

LP Position Value

This is what your liquidity position is actually worth today, in dollars, if you withdrew it right now at the new price. Because the pool automatically rebalanced your holdings as ETH climbed, selling some of your ETH into USDC along the way to keep the pool’s internal formula balanced, you don’t hold 1.667 ETH anymore. You hold less ETH and more USDC than a pure hold would have left you with. Working through the constant-product math, your LP Position Value comes out to roughly $14,142, which not coincidentally is $15,000 (your HODL Value) reduced by 5.72%.

How to read it: this is the real, current, on-chain value of your stake, not a projection or an estimate. If you closed your position this second, this is the dollar amount you’d walk away with, before adding any fees you’ve earned.

Net Result (with fees)

This is LP Position Value, plus whatever trading fees you’ve collected, minus HODL Value. Using our numbers: $14,142 in LP value, plus $150 in fees, minus $15,000 HODL value, gives you a Net Result of about −$708.

How to read it: this is the single number that actually answers the question every LP should be asking, was providing liquidity worth it compared to just holding? Notice that it’s entirely possible for this number to flip positive even when your Impermanent Loss % stays negative, if the pool generates enough fee income to more than cover the gap. It’s equally possible, and the Uniswap-wide study cited earlier proves this happens at scale, $199.3 million in fees against $260.1 million in impermanent loss, for fee income to fall short. This field tells you, for your specific position, which side of that line you landed on.

Token A Amount Now

This is how many actual units of your volatile token (ETH in our example) your LP position currently holds, after the pool’s automatic rebalancing. You deposited 1.667 ETH. After the pool sold portions of it into USDC on the way up to keep its internal pricing formula balanced, you’re now holding somewhere around 1.179 ETH, less than you started with, even though ETH’s price went up.

How to read it: this is impermanent loss made visible as something concrete instead of a percentage. The pool sold your appreciating asset into the one that didn’t move, which is the exact mechanism that produces the loss in the first place. If this number is meaningfully lower than what you originally deposited, that’s the rebalancing effect at work, not a bug or an error.

Token B Amount Now

The mirror image of the field above, applied to your paired asset (USDC in our example). Since the pool sold some of your ETH along the way, it bought USDC with the proceeds. You deposited $5,000 worth of USDC; you’re now likely holding closer to $7,071 worth, more than you started with.

How to read it: together, Token A Amount Now and Token B Amount Now tell you exactly what you’d physically walk away with if you withdrew today, in native units of each asset, before either gets converted back into a single dollar figure. Add (Token A Amount × current price) to Token B Amount and you’ll land back on your LP Position Value above. That’s a useful way to sanity-check that the numbers on your screen are internally consistent.

Price Change %

The most straightforward field on the panel: the plain percentage move between your Token A Initial Price and your Token A New/Projected Price. In our example, ETH going from $3,000 to $6,000 shows here as +100%.

How to read it: this field exists mainly as a sanity check. Before you draw any conclusions from the Impermanent Loss % or the Net Result, glance at this number and confirm the scenario you built actually matches what you meant to test. It’s easy to mistype a price and simulate a 10x move when you meant to simulate a 50% pump, and this field catches that mistake before it feeds you a misleading result.

Mode 2: DEX Comparison. This mode takes one price scenario and runs it simultaneously through six different pool structures, constant product, three concentrated liquidity range widths, an 80/20 weighted pool, and a Curve-style stableswap, so you can see side by side how dramatically pool design changes your exposure to the exact same market move.

A Worked Example: ETH Doubles in Price

Say you deposit $10,000 into an ETH/USDC pool when ETH is trading at $3,000. Six months later, ETH has doubled to $6,000. Here’s how four different pool types would have treated that same $10,000, with zero fee income factored in yet, just the raw structural difference.

On a standard Uniswap V2-style pool, your impermanent loss would be 5.72%, putting your LP position at roughly $11,314 against a HODL value of $12,000. That’s a $686 gap purely from the mechanics of the pool.

On a concentrated Uniswap V3 position set to a tight ±10% range around your entry price, ETH’s 2x move would have pushed price completely outside your band almost immediately. Your position converts fully into USDC at the edge of the range and stops earning fees the moment price exits, meaning you’d have captured only a sliver of ETH’s actual upside.

On an 80/20 Balancer-style pool weighted toward ETH, the same 2x move produces a far gentler curve, an impermanent loss in the low single digits rather than the mid-single digits you’d see on a 50/50 pool, because you were already holding most of your value in the asset that appreciated.

On a Curve-style stableswap, this scenario doesn’t really apply, since those pools are built for pegged assets that aren’t supposed to move 2x relative to each other in the first place. If you tried to run ETH/USDC through a stableswap curve, the amplification math would break down entirely outside a tight band near parity, which is exactly why nobody pairs a volatile asset against a stablecoin on Curve.

Run all three real scenarios through the calculator yourself and the difference in outcome for identical market conditions becomes impossible to ignore. Pool selection is not a minor detail. It’s arguably the single biggest lever an LP has over their own risk exposure.

Common Mistakes LPs Make Without a Calculator

The single biggest mistake is depositing into a volatile pair without ever modeling what a 2x or 3x price move does to your position. Most people check APY and stop there, treating the advertised yield as the whole story instead of one side of a two-sided ledger.

The second mistake is choosing an ultra-narrow concentrated liquidity range chasing higher fee capture, without accounting for how often that range will be breached. A narrow range earns more per dollar while price stays inside it, but the moment price exits, you’re sitting in a single asset earning nothing, and you have to manually rebalance, paying gas, to get back to earning status.

The third mistake is assuming a stablecoin pool is risk-free because the math says impermanent loss is close to zero near the peg. Near the peg is doing a lot of work in that sentence. Depegs happen, and when they do, the amplified curve that made the pool efficient during normal conditions works against you during the depeg itself.

Frequently Asked Questions

What is impermanent loss in simple terms?

It’s the difference between the value of your funds sitting in a liquidity pool and the value those same funds would have if you’d just held them separately in your wallet. It happens because AMM pools automatically rebalance your token holdings as prices move, and that rebalancing works against you whenever the two assets in the pool diverge in price.

Does impermanent loss disappear if I don’t withdraw?

Only if prices return to exactly where they were when you deposited. In practice, that’s rare over any meaningful timeframe, so treating it as a temporary, ignorable cost is one of the more expensive assumptions an LP can make.

Which pool type has the lowest impermanent loss?

StableSwap pools like Curve, when the paired assets stay near their peg, produce close to zero impermanent loss. Among pools pairing volatile assets, weighted pools that overweight the volatile side (like an 80/20 split) show meaningfully lower IL than standard 50/50 constant product pools at the same price move.

Can trading fees make up for impermanent loss?

Sometimes. The Uniswap study referenced earlier found LPs collectively earned $199.3 million in fees against $260.1 million in impermanent loss, a net loss overall. Whether fees cover your specific IL depends heavily on pool volume, your position size relative to total pool depth, and how volatile the pair is during your holding period. The calculator’s breakeven fee percentage tells you exactly what you’d need to earn to come out even.

Why does Uniswap V3 show higher impermanent loss than V2 for the same price move?

Because concentrating your liquidity into a narrower price band means your capital does more work per dollar, both for fee generation and for the rebalancing that produces impermanent loss. The trade-off is real in both directions: higher potential fee income, higher IL exposure within your chosen range.

Final Word

Every liquidity provider eventually learns this lesson, usually the expensive way. Impermanent loss isn’t a bug or a rare edge case. It’s the built-in cost of the exact mechanism that makes automated market makers work in the first place. The only real defense is knowing the number before you deposit, not after.

Run your position through the Dipprofit Web3 Impermanent Loss Calculator before committing capital to any pool, whether that’s a Uniswap V3 range on Base, a Curve stableswap, or a Balancer weighted pool. Fifty-five DEXs, the correct formula for each one, and a full breakdown of exactly where the numbers come from. Know the trade you’re actually making.

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Dipprofit.com is a free Web3, trading, DeFi tools and educational platform. This article is for educational purposes and does not constitute financial advice. DeFi and liquidity provision carry substantial risk, including smart contract risk, impermanent loss, and total capital loss.