Impermanent Loss Calculator

Uniswap Impermanent Loss Calculator

 

As the name indicates, the Uniswap impermanent loss calculator uses Uniswap’s constant product formula to predict the impermanent loss for the cryptocurrency pair that you have invested in. The impermanent loss is the measure of how much an investor’s share in the liquidity pool has degraded due to the fluctuations within the token’s price. The term impermanent indicates that this loss is infact reversible, only if the token pair goes back to its initial exchange rate.

Is using the impermanent loss calculator worth?

 

Using an impermanent loss calculator is surely worth it, considering that you won’t have to track down every little price fluctuation and put it into a formula to calculate the impermanent loss on your investment. All you would need to do is insert the current and the future (predicted) price of the toke in the calculator to calculate the impermanent loss on your token pair.

How impermanent loss for your investment is calculated?

 

The impermanent loss calculations are usually based on Uniswap’s product formula which states that x * y = k. This leads to the calculation of the impermanent loss via Loss = PoolValue(USD)/HoldValue(100) – 1. The obtained result is multiplied by 100 for percentage conversion.

Should I use the impermanent loss data for making investments?

 

Yes, you should be using the impermanent loss data for making investments. If you’re a strategic investor or someone who is still trying to figure out how the global crypto investment market works, relying on impermanent loss data for making investments would be a smart move. This is because the impermanent loss is the only metric that can credibly highlight the risks involved in your investment if things go south at some point in the future.