Yield Farming Calculator
Estimate the returns you can earn by providing liquidity to a DeFi protocol over a chosen period using its advertised APY. Use this before depositing funds to compare farming opportunities and project earnings in dollar terms.
About this calculator
Yield farming involves depositing tokens into a liquidity pool or protocol in exchange for rewards, typically expressed as an Annual Percentage Yield (APY). The estimated return formula is: Earnings = Liquidity Amount × (APY ÷ 100) × (Farming Days ÷ 365). APY already accounts for compounding, so this formula gives a close approximation of real returns when the APY remains constant over the period. Dividing farming days by 365 prorates the annual yield to your exact time horizon. For instance, depositing $10,000 at 80% APY for 30 days yields: $10,000 × 0.80 × (30 ÷ 365) ≈ $657.53. Be aware that APY in yield farming is highly variable and can drop sharply as more liquidity enters the pool, so projections are estimates, not guarantees.
How to use
Imagine you deposit $8,000 into a liquidity pool advertising 45% APY and plan to farm for 60 days. Enter $8,000 as the Liquidity Amount, 45 as the APY, and 60 as the Farming Period. The calculator computes: Earnings = $8,000 × (45 ÷ 100) × (60 ÷ 365) = $8,000 × 0.45 × 0.1644 = $591.78. You would earn approximately $591.78 over the 60-day period, assuming the APY stays constant. In practice, monitor the pool's APY regularly since it fluctuates with total value locked (TVL) and token reward emissions.
Frequently asked questions
What is impermanent loss and how does it affect my yield farming returns?
Impermanent loss occurs when the price ratio of the two tokens in a liquidity pool changes from the moment you deposited them. Because automated market makers (AMMs) rebalance your share of the pool continuously, you may end up with less value than if you had simply held the tokens. The loss is 'impermanent' because it reverses if prices return to their original ratio, but it becomes permanent when you withdraw. High APY rewards are often designed to compensate liquidity providers for taking on this impermanent loss risk, so always compare the APY against your estimated impermanent loss before farming volatile pairs.
Why does the APY in yield farming change so frequently?
Yield farming APY is determined by the total amount of liquidity in the pool and the rate at which the protocol distributes reward tokens. When more users deposit funds (higher TVL), the same reward pool is split among more participants, reducing each person's share and lowering the APY. Conversely, if TVL drops or the protocol increases reward emissions, APY rises. Token price volatility also affects APY in real time since rewards are often paid in the protocol's native token. This is why APYs can fall from triple digits to low double digits within days of a new farming launch.
How do I evaluate whether a yield farming opportunity is worth the risk?
Start by assessing the protocol's security — look for audits from reputable firms, bug bounty programs, and the length of time the protocol has operated without an exploit. Next, understand the source of yield: sustainable farming income comes from real trading fees, while yield backed only by token emissions can collapse when the token price falls. Factor in impermanent loss for the specific trading pair, withdrawal lock-up periods, and gas costs for entry and exit. Finally, compare the risk-adjusted return against simpler alternatives like crypto lending or staking before committing capital.