Impermanent loss calculator

The LP's cost versus holding.

Interactive: impermanent lossMedium

Providing liquidity to a 50/50 automated market maker means selling the winner as it rises. The cost versus simply holding has a name — and a formula.

Price ratio (new ÷ old)

Impermanent loss: —
HODL value (from 100): —
LP value (before fees): —
Fees needed to break even: —

IL = 2√r/(1+r) − 1 for a constant-product pool. A 2× move costs ~5.7% versus holding; a 4× move ~20%. Trading fees are the compensation — whether they cover it is the entire LP business decision.

The idea behind it

This calculator belongs to Digital Assets, where the mechanism it computes is explained step by step, with the formula, what each input means and where the simple model stops being right. Everything is computed in your browser; nothing you type is sent anywhere.

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Not advice. This explains how something works; it is not a recommendation, and nothing here is tailored to you. You can lose everything you put in — with leveraged instruments, considerably more. StrikeAndYield is not a regulated firm and provides no financial services.

The same in full — six points, and why each one matters

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Nothing here is tailored to you. This is written for a general audience. It does not consider your objectives, financial situation, knowledge, time horizon or tolerance for loss.
The examples are simplified. Worked examples use round numbers and leave out costs, spreads, taxes, collateral, settlement and market conventions that materially change real outcomes.
The models are teaching models. Formulas shown are standard textbook formulations. Institutions add calibration, live market data and credit, funding and capital adjustments — nothing here will reproduce a dealer’s quote or produce a valuation you can rely on.
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