QuantumPoolsCover Value
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LP education · the flagship metric

Cover Value: are your fees actually beating impermanent loss?

One ratio that tells you whether providing liquidity is outperforming simply holding the two tokens — measured at the current mark.

TL;DR

Cover Value = total fees earned ÷ |impermanent loss vs HODL|, at the current mark.

Above 1× — fees are beating IL: you're net ahead of just holding the tokens. Exactly 1× — fees precisely cover the loss: break-even vs HODL. Below 1× — fees haven't caught up yet; QuantumPools shows this as a negative multiple (e.g. −3.85×), meaning fees would need to be 3.85× as large to cover.

Everything here is unrealized — both numbers move with price until you withdraw or rebalance.

Why this metric exists

The one question it answers

Every LP position pays you fees. Fees look like pure income — a number that only goes up. But providing liquidity has an invisible cost: impermanent loss, the gap between what your position is worth now and what the tokens you originally deposited would be worth if you had simply held them.

So the honest question is never "how much did I earn in fees?" It's: did the fees outrun the IL? Cover Value is exactly that — the ratio of the two, in dollars, right now.

Fees are the income. IL is the cost. Cover is income ÷ cost. A pool paying spectacular fees can still be a losing trade if the pair is volatile enough — and a boring pool with modest fees can quietly beat holding. Cover makes that visible in one number.

The math

One division, one guard rail

Cover = F / |ILloss|
F = total fees earned (uncollected + claimed)  ·  |ILloss| = max(VHODL − VLP, 0)

The denominator only counts the loss side. If your position is currently worth more than holding (an IL gain — it happens), the loss is 0, not negative. There's nothing for fees to cover.

And there's a floor: an IL loss under $0.005 — half a cent — counts as zero. Dividing fees by half a cent of price noise would produce a giant, meaningless ratio, so QuantumPools doesn't compute one. That epsilon gives the metric four possible states:

StateWhenShown asMeaning
pendingfees or IL still unknown (no entry basis yet)pendingWe won't guess — the ratio waits until the original deposit is known.
uncappedIL loss < $0.005 and fees > 0no ILFees exist with effectively zero IL loss — fees fully cover, no loss vs hold.
noneIL loss < $0.005 and fees ≤ 0—No fees and no loss yet. Nothing to measure.
okIL loss ≥ $0.005F / loss, as 2.40× or −3.85×The real ratio — green at 1× and above, red below.

Diagram · reading the number

The cover gauge

Think of cover as a gauge from 0× to 3×+. Everything left of 1× means fees are behind; the gold line at 1× is break-even vs HODL; everything right of it means fees are winning.

1× break-even fees behind IL fees beating IL 0×1×2×3× 0.26× shown −3.85× 2.40× fees 2.4× the IL
Three example positions. At 0.26× fees have covered about a quarter of the IL — QuantumPools renders that as −3.85× (see below). At 2.40× fees are well ahead.

How QuantumPools shows it

The negative-reciprocal display

A cover of 0.26 is technically correct but hard to feel. QuantumPools never shows a cover below 1× as a decimal fraction. Instead it shows the negated reciprocal:

shown = cv ≥ 1 ? cv : −(1 / cv)

So a cover of 0.26 renders as −3.85× — read as "fees would need to be 3.85× as large to cover the IL". You are 3.85× short. It is not a negative ratio; it's a shortfall multiple, styled red. Ratios at 1× and above render as themselves, styled green.

True ratio (F ÷ |IL|)What the tile shows
0.10−10.00×
0.26−3.85×
0.50−2.00×
1.001.00×
1.801.80×
4.204.20×

Formatting details: magnitudes of 100 and above round to whole numbers with commas; below 100, two decimals. A cover of zero or less, or a non-finite value, shows "—". Fees with an IL loss under $0.005 show the literal string no IL — that's the uncapped state, not an error and not infinity: the denominator is simply ~zero.

The dollar figure beside it. On position cards, Metrics and the totals, the headline is the signed net in dollars: fees earned + impermanent loss (fees − |IL loss|). It is red when fees have not yet covered the IL and green when they have, for example −$170.10 · −1.51× or +$92.79 · 4.15×. The multiple next to it follows the rule above. The two always agree in sign: net below $0 means cover below 1×, which is shown negative.

Diagram · the race over time

Fees grind, IL swings

Fees accumulate steadily — they only go up. IL breathes with price: it grows as the pair diverges and shrinks if price comes back. Cover is the running score of that race.

cover = 1× (day 50.6) EXPOSED · fees < |IL| · cover below 1× COVERED |IL| vs HODL (peak $41.69, day 35) cumulative fees $0 $10 $20 $30 $40 01020 30405060 days since deposit USD
Illustration on a $1,000 HODL benchmark: price drifts up (ratio k = 1 + 0.8·sin(πt/70)), IL = |2√k/(1+k) − 1| × $1,000 peaks at $41.69 around day 35, then price partially reverts. Fees accrue at $0.55/day. Fees fall behind on day 4 and don't reclaim 1× cover until day 50.6 — and only because price came partway back. Every plotted point is computed from those formulas.
The red zone is the honest part. During the price move this position's fees covered barely 40% of its IL. A dashboard that only showed fees would have called it a winner the whole time.

Worked example

Two months, one deposit

You deposit two tokens worth $1,000 total into a v3-style pool.

Month 1 — quiet market

fees F = $18.40
|IL vs HODL| = $12.10
cover = 18.40 ÷ 12.10
  = 1.52× (1.5207 exact)
displayed: 1.52× · green

Fees are 52% ahead of the loss. LPing beat holding this month.

Month 2 — price moved hard

fees F = $37.00
|IL vs HODL| = $61.55
cover = 37.00 ÷ 61.55
  = 0.60× (0.6011 exact)
displayed: −1.66× (−61.55/37 = −1.6635)

Fees would need to be 1.66× as large to cover the IL. You'd have been better off holding — so far.

Where the denominator comes from

The genesis basis — no invented numbers

Cover is only as honest as its IL figure, and IL is only as honest as the entry basis — what you actually deposited. QuantumPools reconstructs that original deposit from the position's own on-chain history (the "Genesis Machine"), so Cover Value and IL are chain-exact with no manual step.

On-chain mint & history the position's own events Genesis Machine reconstructs the true deposit Basis locked · immutable only a human edit overrides Current LP balance − reinvested fees compounded fees are stripped back out so earnings can't mask the loss |IL| = max(V(HODL basis) − V(LP), 0) at today's prices, over the position's whole life → the Cover denominator
Once a basis is reconstructed from chain history it's stamped and locked — automatic back-fills can never overwrite it. Only a human edit wins over a genesis basis.

Two details matter a lot here:

1. Reinvested fees are stripped back out. When the keeper auto-compounds, earned fees sit inside your current balance. Comparing that straight to HODL nets earnings against the loss — a position could report no impermanent loss while having given up most of its principal. So compounded fees are removed at current prices before the HODL comparison. They can't mask IL, and they aren't double-counted as earnings.

2. Missing ≠ zero. Until a genesis basis exists, cover shows pending — QuantumPools never invents entry balances. A single-sided deposit (a mint entirely in one token) keeps its genuinely-zero leg; back-filling it with current holdings would inflate the HODL benchmark and overstate IL. And a tick-snapshot fallback stamped after a rebalance spans hours, not the position's life — which is why the chain-reconstructed basis, not the tick math, is the real method.

Using it

What Cover Value is useful for

Position triage. Sort your book by cover. A position sitting deep below 1× for weeks is telling you its fee tier doesn't pay for its volatility — a candidate to close, narrow, or rebalance. A position holding 2×+ is earning its keep.

Comparing fee tiers and pairs. Two pools of the same pair at different fee tiers, or a stable pair vs a volatile one — cover puts them on the same scale: fee income per dollar of divergence cost.

Judging the whole book. The aggregate cover across all positions is ΣF ÷ Σ|IL loss| — total fees over total losses. It is deliberately not the average of per-position ratios (one tiny position at 40× would drown the number), and IL gains contribute zero to the denominator — they never offset another position's loss. Closed and burned positions are excluded, since a burned position's last-seen numbers would sit in the denominator forever.

The partial-sum honesty rule. While some positions still lack an entry basis, the aggregate is a partial sum — those positions are pending, not zero. QuantumPools labels it "Impermanent loss · N of M LPs" with a PARTIAL note instead of calling it "Total", so a small early number never masquerades as your whole book's IL.

One platform caveat: on Solana positions cover shows "—" with a note — there's no genesis-basis equivalent there yet, so it's stated as unavailable rather than left eternally pending.

Limits

What Cover Value is not

It's not APR. Cover has no time axis — 1.5× after a week and 1.5× after a year are very different investments. Use it alongside yield metrics, not instead of them.

It's not realized profit. Everything is marked to the current price. IL is unrealized until you withdraw or rebalance — price can come back (that's the "impermanent" part) or keep going. Realized cover, locked in at each rebalance and withdrawal, is a separate figure — coming later to QuantumPools.

It's not predictive. Both the numerator and the denominator move. Fees only rise; IL can double overnight or vanish. A 3× cover today is a snapshot, not a promise — nothing on this page is a forecast of returns.

Try it

Cover calculator

Enter your total fees earned and your current IL loss vs HODL (both in USD). The static examples above tell the same story if this widget doesn't load.

True ratio
0.60
QuantumPools shows
−1.66×
Fees cover 60% of the IL — you're 1.66× short of break-even vs holding.

Uses the product's exact rules: losses under $0.005 count as zero ("no IL" when fees exist), and covers below 1× display as the negated reciprocal.

Educational content, not financial advice. LP positions can lose value; nothing here promises returns.