Uniswap V2 vs V3 Impermanent Loss

V2-style full-range liquidity and V3-style concentrated liquidity do not share one complete position-value formula. The standard constant-product IL formula is appropriate only for the stated full-range model.

Full-range V2-style position

A two-token V2 pool holds liquidity across the entire positive price domain and follows x×y=k. Entry and exit prices determine the fee-free divergence result after arbitrage, subject to the model assumptions.

Concentrated V3-style position

A V3 position selects lower and upper price bounds. Inside the range it holds both assets in changing proportions; outside the range it becomes one-sided and stops earning fees until price re-enters. Position value depends on range liquidity and square-root price boundaries.

Inputs a V3 calculator needs

A range-specific tool needs current price, lower and upper bounds, liquidity or deposited token amounts, token decimals, fee tier, time, fee allocation, and costs. Entry and exit prices alone are not enough to reconstruct range exposure or fees.

Full-range settings still require version context

A very wide V3 range can resemble full-range exposure, but capital efficiency, tick boundaries, fee tier, protocol behavior, and actual fee share still matter. Do not relabel a V2 result as exact V3 analysis.

Use the current tool within its boundary

Use the CalculatorGeek tool for two-token full-range constant-mean scenarios and HODL/capital break-even. Treat a concentrated position as unsupported until a tested range-specific calculator is published.

Use this information

Apply the method in the Impermanent Loss & LP Break-Even Calculator. Keep the entered assumptions with the result so another reader can reproduce it.

Return to the cluster guide or review fee-estimation limits for the next decision.

Frequently asked questions

Can this guide replace a written contract or professional review?

No. It explains a reproducible planning method and the questions to verify; the applicable contract, official source, or qualified adviser controls.

Why are the assumptions shown instead of hidden defaults?

Financial results can change materially with tax, price, risk, cost, time, and responsibility assumptions. Visible inputs make the answer auditable.

How often should I revisit the result?

Recalculate whenever a quoted rate, fee, price, contract term, source rule, or risk allocation changes.

Sources

Sources and methodology reviewed 2026-09-25. Results are planning estimates, not a lender quote, tax opinion, investment recommendation, legal opinion, or provider proposal.