What Is the Difference in Impermanent Loss Calculation for a Standard Pool versus a Concentrated Pool?
In a standard pool, IL is calculated based on the divergence of the final price ratio from the initial ratio, spread across the entire price range. In a concentrated pool, the IL calculation is more complex.
It is only calculated relative to the price movement within the defined range, and the IL becomes 100% (relative to the deployed capital) once the price moves outside the range, as the position is entirely in the less valuable asset.