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Impermanent Loss
See how price changes affect liquidity providers
ℹ️ Simplifications
This is an educational visualization, not a technical specification. Some details are simplified:
- No LP Fees: Real pools charge trading fees (typically 0.05%–1%), which can offset impermanent loss over time.
- No Incentive Rewards: Many protocols offer additional token rewards for liquidity providers, not shown here.
- Constant Product AMM: Uses the classic Uniswap v2 formula (x × y = k). Modern DEXs use concentrated liquidity and other optimizations.
- Single Position: Assumes a simple 50/50 split. Real strategies may use multiple ranges or hedging.
- Stable Reference: One side is shown in USD for clarity. Real pools often pair two volatile tokens, making value tracking more complex.