What is impermanent loss?
When you provide liquidity to a constant-product AMM, the pool keeps rebalancing your two tokens as the price moves: it sells the token that goes up and buys the one that goes down. Impermanent loss is the difference between the value of your position in the pool and the value you would have if you had kept the tokens in your wallet. It is called impermanent because it disappears if the price returns to its initial level.
Full range formula (Uniswap v2)
With r the ratio between the new price and the initial price of token A:
IL = 2 · √r / (1 + r) − 1
The loss only depends on the size of the price move, not on its direction in ratio terms: a 2× move costs about 5.7%, a 4× move 20%, and a 0.5× move also about 5.7%.
Impermanent loss table
Impermanent loss of a full range position for common price moves. A rise and a fall with the same ratio (for example +100% and −50%) give the same loss.
| Price up | Or price down | Impermanent loss |
|---|---|---|
| +10% | -9% | -0.11% |
| +25% | -20% | -0.62% |
| +50% | -33% | -2.02% |
| +100% | -50% | -5.72% |
| +200% | -67% | -13.40% |
| +300% | -75% | -20.00% |
| +400% | -80% | -25.46% |
| +900% | -90% | -42.50% |
Concentrated liquidity (Uniswap v3)
A concentrated position only provides liquidity between a lower and an upper price. It earns more fees per dollar while the price stays in range, but the impermanent loss is amplified for the same price move. When the price leaves the range, the position is entirely in one token: token A below the range, token B above it.
Assumptions
- Prices are expressed in token B; values are shown in USD assuming token B is a USD stablecoin.
- Full range deposits are split 50/50 in value; concentrated deposits follow the ratio required by the range.
- Trading fees are only included if you enter them. Gas costs, slippage and protocol specifics are ignored.
- The calculation runs entirely in your browser. No data is sent anywhere.
For educational purposes only. This is not financial advice.