Why is an Impermanent Loss Calculator Needed?
If you want to understand in detail how impermanent loss works with a detailed example, I recommend reading this Binance article. To understand where the impermanent loss calculator calculations come from above, you can read this Medium article.
Once you read those two articles, you’ll realize that a lot can happen over a year where the APR presented by DeFi exchanges may be inflated. The hope is to be able to make conservative assumptions showing how the change in prices over a year can impact overall profitability for providing liquidity.
If you have any suggestions to make this calculator better, please reach out to me on social media (I’ll see if I can incorporate the changes to make this a more useful free tool for everyone😊).