Impermanent Loss Calculator - DeFi Liquidity Mining Loss & Profit Assessment
Calculate impermanent loss in DeFi liquidity mining to help assess the true returns of providing liquidity.
Instructions
What is Impermanent Loss?
Impermanent Loss (IL) refers to the loss in asset value when providing liquidity in DeFi pools compared to simply holding the tokens. When the price ratio of the two tokens changes, the AMM automatically adjusts the token ratio in the pool, causing the withdrawn asset value to be less than the value from simply holding.
Impermanent Loss Formula: IL = 2 × √(price ratio) / (1 + price ratio) - 1
Where price ratio = (Token A current price / Token A initial price) / (Token B current price / Token B initial price)
Note: If Token B is a stablecoin (e.g. USDT), the price ratio equals Token A's price change multiplier. Impermanent loss only becomes a realized loss when you withdraw liquidity from the pool. Trading fee income and rewards from liquidity mining may offset the impermanent loss.
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