Compare impermanent loss against trading fee income for liquidity pool positions. See if your LP earnings outweigh the cost of price divergence.
The key question for any liquidity provider is simple: do my trading fee earnings exceed my impermanent loss? If yes, the LP position is profitable. If not, you would have been better off simply holding both tokens.
This IL vs Fees Calculator combines both sides of the LP equation. Enter your impermanent loss (from price divergence) and your accumulated fee income to see the net result. The tool clearly shows whether your position is in profit or loss, and by how much.
Many DeFi users focus only on the fee APY without accounting for IL, or panic about IL without considering fee income. This calculator brings both together for a complete picture of your LP performance.
Crypto traders, long-term holders, and DeFi participants benefit from transparent crypto il vs fees calculations when planning entries, exits, or portfolio rebalances. Revisit this calculator whenever market conditions shift to keep your strategy grounded in accurate data.
IL and fees are two sides of the same LP coin. Looking at either in isolation is misleading. This calculator combines both to show your actual net return, helping you decide whether to keep, adjust, or exit your LP position. Real-time recalculation lets you model different market scenarios quickly, so you can act with confidence rather than relying on rough mental estimates.
Net Return = Fee Income + Reward Income − |Impermanent Loss|. IL = positionValue × (2√r/(1+r) − 1) where r = price ratio.
Result: +$396 net profit
At a 1.5x price ratio, IL is 2.0% or $200 on a $10,000 position. Fee income of $400 plus $200 in rewards totals $600. Net return = $600 − $204 = +$396 profit. The LP is beating a simple hold strategy by $396.
LP profitability = Fee Income + Reward Income − Impermanent Loss − Gas Costs. Each component matters. Ignoring any one can lead to a false assessment of whether your position is truly profitable.
Fees are proportional to the trading volume flowing through your pool. A pool with $1M daily volume and a 0.3% fee tier generates $3,000/day in total fees for all LPs. Your share depends on your fraction of total liquidity.
Consider exiting when: (1) IL is accelerating faster than fee accumulation, (2) the token pair correlation has broken down, (3) farming rewards have dried up, or (4) you can earn more yield in a different strategy with less risk.
Most DeFi dashboards (Zapper, DeBank, APY.vision) track fee income. Some pool interfaces show accumulated fees directly. You can also calculate fees from your share of pool volume times the fee tier.
Higher fee tiers (1%, 0.3%) earn more per trade but attract less volume. Lower fee tiers (0.05%, 0.01%) attract more volume but earn less per trade. The optimal tier depends on the asset pair volatility and competitive landscape.
Yes — farming rewards (token incentives for LPs) are real income that offsets IL. Include them for a complete picture. However, consider the sustainability of these rewards, as they can decrease over time.
A negative net return means IL exceeds your fee income. Consider exiting the position, switching to a different pool with higher volume, or tightening your price range in concentrated liquidity to boost fees.
In volatile markets, check weekly or when significant price moves occur. In stable markets, monthly checks are usually sufficient. Set price alerts for your LP tokens to track large divergences.
Rarely. Some traders provide liquidity as a hedging strategy or to accumulate both tokens at averaged prices. But for pure yield purposes, if you expect IL to exceed fees, holding is better.