Starlight Tools

50/50 AMM Impermanent Loss Calculator

Calculate impermanent loss for Uniswap-style 50/50 AMM liquidity pools. Enter both token prices and a deposit size to compare LP value with HODL; fees, rewards, and APR are optional and excluded by default.

Assumptions and Pool Types

Supported by this calculator

  • Two-token, 50/50 constant-product AMM pools.
  • Full-range Uniswap v2-style LP behavior.
  • LP versus HODL comparison using the same starting token amounts.
  • Manual offsets for earned fees, incentives, and expected APR.

Not modeled by default

  • Concentrated liquidity ranges such as Uniswap v3.
  • Weighted pools, stable-swap curves, leverage, or rebasing tokens.
  • Dynamic fees, changing pool share, gas costs, or smart contract risk.
  • External rewards unless you enter them manually.

Inputs

Price in a shared currency, such as USD.

Use 1 for a stablecoin quote token.

Future or exit price for Token A.

If Token B is stable, leave this at 1.

Split 50/50 into Token A and Token B at entry.

Secondary shortcut: updates Token A future price versus Token B.

Optional fee and reward offsets

Enter your expected or actual fee earnings.

Liquidity mining, points converted to value, or other offsets.

Optional annualized offset based on deposit value.

Used only when APR is entered.

Break-even volume assumes this fee rate reaches your position.

Results

IL —
Net LP —
Vs HODL —
Impermanent loss
— %
LP underperformance versus HODL before fees.
LP value
—
Pool position value before offsets.
HODL value
—
Same starting token amounts held outside the pool.
LP minus HODL
—
Before fees and rewards.
Net LP after offsets
—
LP value plus entered fees, rewards, and APR.
Net versus HODL
—
After entered offsets.
Break-even offset
—
Additional fees or rewards needed to match HODL.
Break-even volume
—
At the entered fee tier, before pool-share differences.
Position Token A amount Token B amount Token A value Token B value Total value
Enter prices to see token amounts.

Common Price-Move Scenarios

These scenarios hold the deposit and Token B path constant, then apply common relative moves for Token A versus Token B.

Relative move Ratio IL LP vs HODL Curve
Enter prices to see scenarios.

Worked ETH/USDC Example

Suppose you deposit $10,000 into a 50/50 ETH/USDC pool when ETH is $2,000 and USDC is $1. You start with 2.5 ETH and 5,000 USDC. If ETH later rises to $3,000 while USDC stays at $1, the relative price ratio is 1.5x.

HODL would be worth $12,500.00. The LP position would rebalance to about 2.0412 ETH and 6,123.72 USDC, worth $12,247.45. The impermanent loss is -2.02%, or -$252.55 versus HODL before fees.

Formula for a 50/50 Constant-Product Pool

Relative price ratio r = (A future / B future) / (A initial / B initial)

Impermanent loss depends on the pair ratio, not just one token's dollar price.

Impermanent loss IL = 2 * sqrt(r) / (1 + r) - 1

The result is usually negative unless the ratio returns to 1.

HODL value HODL = startA * A future + startB * B future

This keeps the same token quantities you deposited.

LP and net value LP = endA * A future + endB * B future Net LP = LP + fees + rewards + APR offset

This is not a concentrated-liquidity, stable-swap, or weighted-pool formula.

What is impermanent loss?

Providing liquidity in a decentralized exchange can look simple on the surface: you deposit two tokens into a 50/50 automated market maker (AMM) and earn fees when people trade. But when prices move, the pool automatically rebalances your token mix. That change in mix can make your position worth less than if you had simply held the two tokens outside the pool. The difference between the liquidity provider value and a basic HODL value is called impermanent loss. This calculator makes that concept easy to see by turning a price change into a clear percentage and value comparison.

In a constant-product AMM (like Uniswap v2), the pool keeps the product of the two token reserves constant. When Token A rises in price relative to Token B, arbitrage trading removes some Token A and adds more Token B until the pool reflects the new market price. You end up with fewer of the token that went up and more of the token that went down. Impermanent loss is the gap that results from that rebalancing. It is called “impermanent” because if prices return to the starting ratio, the loss disappears. In practice, many users weigh this against swap fees earned, liquidity mining rewards, and time spent in the pool.

How to use this impermanent loss calculator

  1. Enter the initial and future prices for both tokens in the same currency.
  2. Enter your deposit size, assuming a 50/50 split between the two assets.
  3. Add optional trading fees, rewards, APR, and days in pool if you want a net result.
  4. Review the impermanent loss percentage, LP value, HODL value, token amounts, and break-even offset.
  5. Use the relative-move shortcut or preset chips to test different market scenarios quickly.

The results show how much a liquidity position would trail a simple hold strategy for the same starting amounts. A negative IL percentage means the LP position underperforms HODL by that percent. If fees earned are greater than the difference, the liquidity position can still end up ahead overall.

Assumptions in this calculator

  • Two-asset, 50/50 constant-product pool.
  • Both token prices are entered in the same external currency.
  • Fees and rewards are excluded by default and included only when you enter them.
  • Outputs compare the LP position to holding the same starting amounts outside the pool.

Real-world examples

If you provide liquidity to an ETH/USDC pool and ETH rallies, your pool position shifts toward USDC, which can lead to impermanent loss relative to holding ETH and USDC separately. If ETH falls, the same effect happens in reverse. Traders and LPs use impermanent loss calculations to decide when fees and rewards are likely to offset the loss, to compare volatile pairs versus stable pairs, and to estimate how much price movement their strategy can tolerate.

This is an educational tool. Real pools may include swap fees, dynamic rewards, different weighting, and smart contract risks. Always confirm assumptions and understand the full risk profile before providing liquidity.

Impermanent Loss FAQ

Does this include fees?

Fees are excluded by default so the base result shows pure impermanent loss. Enter earned fees, rewards, or APR and days in pool to estimate the net LP outcome after offsets.

Why is impermanent loss negative when price rises?

When one token rises relative to the other, the AMM rebalances into less of the outperforming token and more of the other token. That can make the LP position trail a simple HODL position even when the LP is up in dollar terms.

Is impermanent loss realized only when I withdraw?

The underperformance changes as the price ratio changes, but it is locked in only when you withdraw or close the position. If the ratio returns to its starting level before withdrawal, the modeled impermanent loss returns to zero.

Can fees offset impermanent loss?

Yes. Swap fees, incentives, and rewards can offset or exceed impermanent loss. The calculator shows the additional offset needed for the LP position to match HODL.

Does this work for Uniswap v3?

Not directly. This is a full-range 50/50 constant-product model. Uniswap v3 concentrated liquidity depends on your range, whether the position goes out of range, and the actual fee path.

What happens if both token prices move?

The calculator uses the relative price ratio. If both tokens move by the same percentage, impermanent loss is zero because the pair ratio is unchanged, though the dollar value of both LP and HODL can still rise or fall.

Is impermanent loss the same as losing money?

No. Impermanent loss means the LP position underperformed HODL. The LP can still gain value overall, especially if both assets rise or if fees and rewards offset the relative loss.

5 Fun Facts about Impermanent Loss

Symmetry surprise

Reciprocal price moves cause the same IL%. A +100% move and a −50% move both change the price ratio by 2×.

Magnitude only

Fees can flip it

Enough swap fees can outweigh IL. For small swings, ~0.3% fees on volume can make LPs beat HODL.

Fee offset

IL isn’t realized until exit

Your LP tokens track pool value continuously, but IL only “locks in” when you withdraw—prices could drift back.

Timing matters

Volatility is the villain

Bigger price ratios mean bigger IL. Doubling price causes ~5.7% IL; a 5× move means ~25.5% IL.

Ratio risk

Weights change the curve

70/30 or 80/20 pools dampen IL vs 50/50. This calculator shows the classic 50/50 case.

Pool design

Explore more tools