Impermanent Loss Calculator
Uses AMM formula to calculate impermanent loss.
Fees are not included within the result.
Value if held:
$
You have $1000
If you buy Token A for $500 and Token B for $500 and hold them:
- You would have NaN of Token A and NaN of Token B.
Value if providing liquidity:
$
You have $1000
If you buy Token A for $500 and Token B for $500 and provide them as liquidity:
- You would have NaN of Token A and NaN of Token B (in the liquidity pool).
What is impermanent loss?
Impermanent loss is when the value of your crypto in a liquidity pool changes compared to just holding the assets. It happens when the price of the assets shifts, causing potential losses if withdrawn at the wrong time, and it occurs exclusively in Automated Market Makers (AMMs).
How does impermanent loss work?
Impermanent loss occurs when the price of crypto in a liquidity pool changes. The pool automatically adjusts the ratio of assets, leading to a potential loss in value compared to holding the crypto outside the pool.
How to reduce impermanent loss?
To reduce impermanent loss:
- Pair Stable Cryptos. Use pairs with similar price movements, like stablecoins.
- Use Protection Tools. Some platforms offer impermanent loss protection.
- Withdraw Strategically. Avoid withdrawing during high volatility.
- Diversify Pools. Spread investments across different pools to reduce risk.