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Providing liquidity can underperform holding when prices diverge. This calculator estimates that gap so fee income has a hurdle rate to beat.
Launch Impermanent Loss Calculator →Purpose
Providing liquidity can underperform holding when prices diverge. This calculator estimates that gap so fee income has a hurdle rate to beat.
When to use it
- Before entering a two-asset AMM pool
- When price already moved and you want a quick IL estimate
- To compare fee APR against expected divergence risk
- When explaining IL to someone new to LPing
How to use it
- Enter the price change. Input how much the pair’s relative price moved (or your scenario).
- Review IL estimate. Read the percentage divergence versus holding both assets outside the pool.
- Compare to fees. Ask whether expected trading fees can realistically offset that IL.
- Decide with full risk in mind. Smart-contract risk and token volatility still apply beyond the IL number.
Benefits
- Turns a fuzzy DeFi risk into a concrete percentage
- Helps set a fee income hurdle before depositing
- Educational default for AMM newcomers
- Works offline as pure math after load
Pitfalls to avoid
- Simple constant-product models are not every AMM design
- Concentrated liquidity (Uniswap v3 style) needs different tools
- Fees earned are not simulated unless you add them yourself
- IL can become permanent if you exit after divergence
What impermanent loss measures
Impermanent loss compares the value of LP tokens to simply holding the same assets. When relative prices move, rebalancing inside the pool can leave you with less total value than HODLing — unless fees make up the difference. The loss is “impermanent” only while you stay in; exiting crystallizes it.
CryptonicTools focuses on a clear educational estimate so you can talk about IL without a spreadsheet.
Benefits and limits for LP decisions
Use the number as a hurdle: if your fee APR cannot plausibly cover expected divergence, the LP may be entertainment, not edge. Stable-stable pools usually show less IL; volatile pairs need higher fees or shorter horizons.
Pair this guide with APR→APY and staking tools when the farm quotes emissions in a third token. Emissions can dominate short-term returns and disappear later.
Purpose on CryptonicTools
The purpose is risk literacy for DeFi users who already find calculators for profit and leverage. IL belongs in that toolkit. It is not a promise about any specific pool’s future fees or safety.
Related links
Updated 2026-09-09. Educational only — not financial advice.