See how much a 50/50 liquidity position loses versus simply holding the two tokens, given a change in their price ratio.
For a constant-product (x·y=k) pool, IL = 2·√r / (1+r) − 1, where r is the price ratio change between the two assets. A 2× divergence costs about 5.7%; a 4× divergence about 20%.
Impermanent loss is only a loss if fees and incentives don’t cover it. Compare the IL figure against the pool’s fee APR on the yields screener to judge whether a position pays for its risk.
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