Liquidity Pool Calculator
Calculate LP token value and pool dynamics
INITIAL DEPOSIT
CURRENT STATE
YOUR LP POSITION
INITIAL HOLDINGS
CURRENT HOLDINGS
POOL MECHANICS & ANALYSIS
LP Stories
Added 1 ETH, Got Back 0.7 ETH
Provided 1 ETH + $2K USDC to pool. ETH price went $2K → $4K. Pool rebalanced via x*y=k. My LP now holds 0.707 ETH + $2,828 USDC = $5,656. If I'd just held: 1 ETH ($4K) + $2K USDC = $6K. IL cost $344. Calculator would've shown exact rebalancing math before I LPed.
Fees Covered My IL
LP'd $10K in ETH/USDC. After 6 months: IL = -$400, but earned $600 in fees (0.3% on $2M volume). Net: +$200 vs HODL. High-volume pools earn enough fees to offset IL. Low-volume pools don't. Calculator showed I needed $1.5M+ volume to break even.
My Pool Share Got Diluted
Started with 5% pool share (100 LP tokens of 2000 total). Others added liquidity, total LP grew to 10,000. My 100 LP = now 1% share. Value per LP token increased but my % dropped 5x. Get same $ value but smaller % of fees going forward. Early LPs get diluted as pools grow.
Removed at Wrong Ratio
Added when ETH = $2K. Removed when ETH = $1.5K. Pool had excess ETH (people sold ETH for USDC). Got back 1.15 ETH + $1,732 USDC = $4,457 total vs $4K initial. Made $457 but would've lost less just holding. Timing matters - remove during balanced pool state if possible.
LP Tokens Are Valuable NFTs
My 500 LP tokens in ETH/USDC pool. Initially worth $10K. Pool grew 50x, fees accumulated. Each LP token now worth $35 (was $20). My 500 LP = $17,500. Never farmed, just held LP tokens. Fees auto-compound into pool. Sometimes HODLing LP beats farming.
Calculated Pool Math Saved Me
Before LPing $50K, used calculator. Simulated 30% price moves both ways. Best case: +$2K. Worst case: -$4.5K. Risk/reward ratio 1:2.25. Decided not worth it for this pair. Put money in stablecoin LP instead (zero IL, steady fees). Math prevents emotional mistakes.
Common Questions
How are LP tokens calculated?
LP tokens = sqrt(tokenA amount × tokenB amount). If you add 1 ETH ($2000) + 2000 USDC to empty pool, you get sqrt(1 × 2000) = 44.72 LP tokens. When others add liquidity, you receive LP tokens proportional to your share of total pool value. LP tokens represent your ownership percentage.
What is pool share percentage?
Your LP tokens / Total LP tokens × 100. If you have 100 LP tokens and total is 1000, you own 10% of pool. You get 10% of all trading fees. When you remove liquidity, you receive 10% of each token in pool (not same amounts you deposited due to rebalancing).
How does x*y=k formula work?
Constant product formula keeps pool balanced. Pool has 10 ETH × 20,000 USDC = k (200,000). Someone buys 1 ETH, now 9 ETH remains. To keep k constant: 9 × y = 200,000, so y = 22,222 USDC. They pay 2,222 USDC for 1 ETH. Price adjusts based on trade size.
What happens when I add liquidity?
Must add both tokens in current pool ratio. Pool is 2 ETH : 4000 USDC (1:2000 ratio). To add 1 ETH, you must add 2000 USDC. You receive LP tokens = (your value / total pool value) × total LP supply. Your pool share increases, diluting others slightly.
What happens when I remove liquidity?
Burn LP tokens, receive your share of current pool. Added 1 ETH + 2000 USDC, got 10% pool share. ETH price doubled. Pool rebalanced to 0.707 ETH + 2828 USDC per your 10%. You receive these amounts, not original 1 ETH + 2000 USDC. Calculator shows exact amounts.
How are trading fees distributed?
0.3% fee on each trade added to pool. If pool does $100K daily volume, that's $300/day fees. Split proportionally by LP share. 10% pool share = $30/day. Fees auto-compound into pool, increasing value per LP token. Never need to claim, just remove liquidity to realize gains.
Can I calculate my LP token value?
LP token value = (2 × sqrt(tokenA price × tokenB price) × sqrt(tokenA amount × tokenB amount)) / total LP supply. Simpler: (total pool value in USD) / total LP tokens. If pool worth $1M and 10,000 LP tokens exist, each LP = $100. Calculator does math for you.
Why does my LP position change?
Pool rebalances via x*y=k formula. Price changes cause arbitrageurs to trade until pool price matches market. Your LP owns fixed % of pool, but token amounts inside pool change. ETH up 50% → pool has less ETH, more USDC. You own fewer ETH than deposited but more USDC.
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