Translate the LP balance into reserve claims
Ownership share equals user LP tokens ÷ total LP supply. Claim A equals reserve A × share, and claim B equals reserve B × share. Position value equals claim A × price A + claim B × price B. Total LP supply must be positive, and user holdings cannot exceed that supply. Both asset prices must use the same quote currency so their values can be added meaningfully.
Work through a proportional example
Imagine a pool with 10,000 LP tokens outstanding, of which you hypothetically own 250. Your share is 2.5%. Reserves of 400 token A and 800,000 token B imply claims of 10 A and 20,000 B. If A is valued at $2,000 and B at $1, the position value is $40,000. Doubling the LP balance while keeping total supply and reserves fixed doubles every proportional claim.
Use a consistent reserve and supply snapshot
A mint or burn can change LP supply, while swaps and fees can change reserves. Combining snapshots from different times distorts the result. The calculation assumes each LP token represents the same pro-rata reserve entitlement and omits protocol-specific adjustments, pending fees outside reserves, and withdrawal costs. Pool token valuation is a mark using supplied prices. Selling the claimed assets may produce different proceeds because of market depth, fees, or price movement.