Yield Farming APY

This calculator turns a pool's advertised APR into an annual yield with compounding, then subtracts the impermanent loss you expect, so you see what is likely to be left.

How the calculation works

First it adds the two income streams: reward APR (tokens the protocol pays for farming) and fee APR (your share of the pool's trading fees). The combined APR is converted to APY with the compound-interest formula APY = (1 + APR / n)ⁿ − 1, where n is how many times a year you harvest rewards and add them back to the pool. Finally, expected annual impermanent loss is subtracted in percentage points.

All fields except frequency are annual percentages. "Compounds per year": 365 for daily, 52 for weekly, 12 for monthly and 1 for no compounding, in which case APY equals APR. Impermanent loss is how far your pool position lags simply holding the same tokens; the calculator does not model it, it uses your estimate.

The output shows the net APY after IL, plus the total APR and the APY before IL, so you can see how much the pair's volatility is costing you.

Worked example

Defaults: rewards 30 %, fees 10 %, daily compounding, IL 5 %. Total APR = 40 %. APY = (1 + 0.40 / 365)³⁶⁵ − 1 ≈ 49.15 %. Subtracting 5 % IL leaves about 44.15 %. On a $1,000 position that is roughly $441 over a year — provided rates and prices stay where they are, which in DeFi they rarely do.

Things to keep in mind

• Every compound costs gas. On small positions, daily harvesting on an expensive chain can eat the whole compounding benefit: at 40 % APR, daily versus weekly compounding is only 49.15 % versus 48.95 %.
• Reward APR is paid in the protocol's token. If that token's price falls, your dollar return falls too, and the calculator does not account for that.
• For a 50/50 pool, impermanent loss can be estimated as 2√r / (1 + r) − 1, where r is the change in the price ratio; a 2× move gives about 5.7 %.
• A very high APY usually signals high risk: smart-contract bugs, rug pulls, stablecoin de-pegs. Yields are not guaranteed and pool rates change daily.
• Crypto rewards are taxable in many countries, including the US; check how your jurisdiction treats farming income.