What Alternative Formulas or Models Exist for Predicting Impermanent Loss under Different Market Conditions?

Beyond the standard formula, more advanced models exist for predicting impermanent loss. Some models incorporate stochastic processes, like Geometric Brownian Motion, to simulate potential price paths and forecast a range of IL outcomes.

Other approaches use options pricing theory, viewing a liquidity position as akin to selling a straddle, allowing for the use of Greeks (like Delta and Gamma) to measure risk exposure. These models aim to provide a more dynamic and probabilistic view of risk rather than a static calculation based on price change alone.