Free Impermanent Loss Calculator for L2 Pools: See What You'd Lose vs. Holding

How This Impermanent Loss Calculator Works

The calculator uses the standard constant-product formula that governs 50/50 automated market maker (AMM) pools — the model popularized by Uniswap v2 and used by many DEXs on Ethereum L2s and other chains. It takes three inputs: the token's price when you entered the pool (P₀), its current price (P₁), and the total value you deposited. From the price ratio r = P₁/P₀, impermanent loss is calculated as IL = 2√r / (1 + r) − 1.

Three assumptions matter when reading the result. First, it models a 50/50 pool where one asset is a volatile token and the other holds a stable price (for example, a token/USDC pair). Second, it isolates impermanent loss itself: trading fees earned by the position are not included, so your real outcome is the IL shown here plus whatever fees the position collected. Third, it assumes a full-range, constant-product position — not a concentrated liquidity position, which behaves very differently (more on that below).

How to Read Your Results

The calculator returns five values. Price Ratio is simply P₁/P₀ — a ratio of 1.8 means the token rose 80% since you deposited. HODL Value is what your deposit would be worth today if you had kept the tokens in a wallet instead of pooling them. Pool Value is what the same deposit is worth inside the pool after the AMM rebalanced it as the price moved. Impermanent Loss (%) and IL Amount (USD) express the gap between those two values — as a percentage of the HODL value and in dollars.

Some reference points from the formula: a token that doubles (r = 2) produces an impermanent loss of about −5.72%; a 4x move produces about −20%; a 50% increase (r = 1.5) about −2.02%. The loss is symmetric in the ratio — a token that halves (r = 0.5) also produces −5.72% — because what generates the loss is price divergence in either direction, not the direction itself. A key property: impermanent loss is relative to holding, not absolute. A pool position can lose against HODL and still be up in dollars if the token rose, and it can beat HODL while being down in dollars if the token fell.

Is Impermanent Loss Different on L2 Pools?

The math is not: the constant-product formula is chain-agnostic, so an identical price move produces the identical impermanent loss on an Arbitrum or Base pool as on Ethereum mainnet. What actually changes on an L2 is the cost of managing the position. Lower transaction fees make it dramatically cheaper to enter, exit, claim fees, or rebalance — actions that on mainnet can cost enough gas to wipe out the returns of a small position. That shifts LP behavior on L2s toward smaller positions and more active management, but it does not change what this calculator measures. If a tool claims to apply a special "L2 formula" for impermanent loss, be skeptical: there isn't one.

Where This Formula Stops Working: Concentrated Liquidity

This calculator applies to full-range, constant-product pools. It does not apply to concentrated liquidity positions (Uniswap v3-style CLMMs, and equivalents on Solana such as Orca), where you provide liquidity only within a chosen price range. Concentration amplifies both sides of the trade: fee earnings multiply, but so does divergence loss. With a typical range of half to double the entry price, the loss from the same price move is roughly four times larger than the full-range figure this tool shows. Using a v2-style calculator to size a concentrated position will materially understate your risk — if your position has a price range, you need a concentrated-liquidity model, not this one.

When Impermanent Loss Outweighs Your Fees

Providing liquidity is a bet that fee income will exceed divergence against holding — and that bet fails more often than most LPs expect. In one of the most cited analyses of concentrated liquidity (Topaze Blue & Bancor, 2021), roughly half of the Uniswap v3 positions studied earned less in fees than they lost to impermanent loss, meaning those LPs would have done better simply holding. Two practical implications follow. First, run the numbers before depositing: use this calculator to see what a realistic price move would cost you, and weigh it against the pool's actual fee yield. Second, remember that impermanent loss only becomes permanent when you withdraw — if the price returns to your entry level, the loss disappears, regardless of the path prices took in between. This is educational modeling, not financial advice; pool returns also depend on fee tiers, volume, and risks this tool does not model.