GlossaryAdvanced
Impermanent Loss Calculator
A tool that estimates the impermanent loss from providing liquidity given a price change.
An impermanent loss calculator estimates the impermanent loss a liquidity provider would experience for a given change in the relative price of the two pooled assets, based on the constant-product AMM formula.
This is a distinct calculation from simply comparing entry and exit portfolio value, since it isolates the specific effect of the AMM's automatic rebalancing from the underlying assets' own price movement.
Examples
- An impermanent loss calculator can show the estimated loss for a range of possible price changes.
- This calculation isolates the AMM-rebalancing effect from the underlying assets' own price movement.