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DeFi Impermanent Loss & LP Yield Calculator.

Interactive DeFi impermanent loss and LP yield calculator. Calculate divergence loss across Uniswap, Raydium, and Aerodrome pools, simulate concentrated liquidity v3 ranges, and determine the exact fee APY required to break even.

Free Runs in your browser Data: Client-Side Math (No API)

Trading & Calculation Currency:

Currency:

Active Currency: USD ($)

Popular Liquidity Pool Presets:

Low DivergencePrice Ratio Change: 1.50x

Impermanent Loss (Divergence)

-2.02%

Represents your position drag compared to holding ETH & USDC in your cold wallet.

Loss in Dollar Value:-$126.28

1. If You Just HODLed

$6,250.00

+25.0% Return

Holding split tokens idle in wallet

2. LP Value (No Fees)

$6,123.72

-2.02% vs HODL

AMM pool balance before fee payout

3. Net LP + Fees

$6,493.66

+$369.94 Fees Earned

Assuming 24.5% APY over 90d

✓

Profitable LP StrategyFee earnings (+$369.94) exceed impermanent loss (-$126.28).

Outperformance vs HODL:+$243.66 (+3.90%)

01 · Liquidity Position Parameters50/50 Value Split

Total Deposit Value (USD)

Token A: ETHInitial: $3,450

Price Change (ETH):+50% ($5,175)

-90% Crash0% Unchanged+100% 2x+400% 5x

Token B: USDCInitial: $1

Price Change (USDC):+0% ($1)

-90%0% (Stable peg)+100%+200%

02 · Fee APY & Horizon SimulatorYield Offset

Estimated Pool Fee APY (%):24.5%

Holding Period (Days):90 Days

7d (Quick LP)30d (1 Month)90d (1 Quarter)180d365d (1 Year)

Required Breakeven APY Hurdle

Minimum APY needed over 90d:8.4% APY

If the pool pays less than 8.4%, impermanent loss will exceed your fee income, and you would earn more holding the tokens.

The AMM Impermanent Loss Curve

Loss percentage relative to price ratio change ($k$). Zero loss occurs only when $k = 1.00$.

Current Position (1.50x)

AMM Divergence Reference Matrix

Standard 50/50 constant product pools ($x \cdot y = k$) reference table.

Theoretical Standard

Price Change Ratio	Relative Divergence ($k$)	Impermanent Loss	Position Value vs HODL	Fee APY to Break Even (90d)
-80% (0.20x)	0.20x	-25.46%	74.54%	136.6%
-50% (0.50x)	0.50x	-5.72%	94.28%	24.3%
-25% (0.75x)	0.75x	-1.02%	98.98%	4.1%
-10% (0.90x)	0.90x	-0.14%	99.86%	0.6%
0% Parity (1.00x)	1.00x	0.00%	100.00%	0.0%
+25% (1.25x)	1.25x	-0.62%	99.38%	2.5%
+50% (1.50x)	1.50x	-2.02%	97.98%	8.2%
+100% 2x (2.00x)	2.00x	-5.72%	94.28%	24.3%
+200% 3x (3.00x)	3.00x	-13.40%	86.60%	61.9%
+400% 5x (5.00x)	5.00x	-25.46%	74.54%	136.6%

Specification & Methodology

Understanding your results.

A rigorous breakdown of the mathematical equations, market assumptions, and step-by-step calculations powering this tool.

Executive Summary · AMM Divergence Mechanics

Impermanent loss is the mathematical opportunity cost of providing liquidity compared to holding: IL = [ 2 · √k / (1 + k) ] − 1, where k = (P₁ / P₀) is the price ratio change factor.

In any automated market maker (AMM) operating on the constant product formula (x · y = k), external price changes force arbitrageurs to extract the appreciating asset and deposit the depreciating asset until pool prices match external markets. Providing liquidity is only more profitable than holding (HODL) when the cumulative trading fee APY and farming incentives earned exceed this percentage divergence loss over your investment horizon.

Mathematical Specification

DeFi Liquidity & Divergence Equations

The three mathematical equations below define the exact boundaries of liquidity provision, pool arbitrage, and fee yield profitability:

01 · Constant Product IL (%)

IL = [ 2√k / (1 + k) − 1 ] × 100

Where k = (P₁_A / P₁_B) / (P₀_A / P₀_B). Governs 50/50 standard pools across Uniswap v2, SushiSwap, Aerodrome Basic, and Raydium.

02 · Net Position vs HODL

ΔV = [ V_LP + Fees ] − V_HODL

Calculates your true net monetary outperformance. If positive, LP fees beat holding; if negative, holding the raw assets in cold storage was superior.

03 · Breakeven Fee APY

APY_be = [ |IL| / (1 + IL) ] × (365 / d) × 100

The exact minimum annualized trading fee return required over d days to fully neutralize divergence drag.

Execution Journey

Worked Example: Providing $10,000 Liquidity to ETH/USDC with a 100% ETH Rally

Suppose a liquidity provider deposits $10,000 into an ETH/USDC pool on Uniswap when ETH is $3,000. Over a 90-day holding horizon, the pool yields 24.5% fee APY while ETH doubles (+100%) to $6,000:

STEP 01

Initial Capital Deposit (50/50 Split) Deposit $10,000 split equally between ETH and USDC

1.666 ETH ($5,000) + 5,000 USDC

STEP 02

HODL Benchmark Value Value if raw tokens were simply held in cold storage

1.666 × $6,000 + $5,000 = $15,000 (+50.0%)

STEP 03

AMM Pool Arbitrage Rebalance (k = 2.0) Arbitrageurs buy cheap ETH from pool; LP ends with fewer ETH and more USDC

IL = -5.72% (-$858 vs HODL)

STEP 04

Accrued Trading Fee Yield (24.5% APY over 90 Days) Swap fees accumulated from trader volume over 90 days

$14,142 × (0.245 × 90/365) = +$854 Fees

STEP 05

Net LP Position vs Starting Deposit Final liquidity position value including fee payouts

$14,142 + $854 = $14,996 (+49.96% ROI)

Key Strategic Takeaway: Even though ETH experienced a 100% price pump creating -5.72% impermanent loss, the pool's 24.5% fee APY generated +$854 in trading fees, virtually neutralizing the divergence ($14,996 LP value vs $15,000 HODL value). In volatile sideways or mildly trending markets, high-volume LPing can outperform holding, but in vertical parabolic bull runs, raw holding preserves maximum upside.

Operational Guide

How to use this tool.

Step-by-step workflow instructions to get the most accurate calculations for your trading strategy.

Select pool preset: Choose a popular trading pair (e.g. ETH/USDC, SOL/USDC, ETH/BTC) or enter custom token names and prices.
Input deposit & prices: Enter your total starting liquidity in your preferred currency along with expected price movements.
Configure fee APY & holding horizon: Input the pool's projected swap fee APY and intended days in the pool to calculate fee offsets.
Inspect decision verdict: Check the net comparison vs HODL, review the divergence curve, and evaluate the required breakeven APY.

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Ledger Hardware Security

DeFi Cold Storage

Protect your LP tokens and DeFi wallet private keys against blind signing, rogue approvals, and malicious phishing drainers.

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How we choose partners. DeFi liquidity provision involves smart contract risk and impermanent loss. We may earn an affiliate commission at no extra cost to you.

Privacy & safety.

Client-side calculation guarantee: All AMM equations, divergence curves, and LP profitability forecasts run 100% inside your web browser. No wallet connections, deposit amounts, or financial parameters are ever sent to remote servers.