DeFi Yield Farming Calculator
Estimate earnings from DeFi yield farming by entering your liquidity amount, APY, and farming duration. Helps liquidity providers evaluate returns before committing capital to a pool.
About this calculator
DeFi yield farming generates returns by providing liquidity to decentralized finance protocols, which reward providers with a share of trading fees and native tokens. The formula for estimating returns is: Earnings = liquidityAmount × (apy / 100) × (farmingDays / 365). Here, liquidityAmount is the USD value of assets deposited into the liquidity pool, apy is the annualized return rate offered by the protocol, and farmingDays is how long you plan to farm. Dividing farmingDays by 365 converts the farming period into a fraction of a year, giving a proportional share of the annual yield. This formula assumes simple interest and a constant APY, which in practice fluctuates based on trading volume, pool size, and token price changes. Impermanent loss — a risk unique to liquidity pools — is not captured here and can reduce actual returns below this estimate.
How to use
Suppose you deposit $10,000 of liquidity into a DeFi pool offering 45% APY and plan to farm for 30 days. Enter liquidityAmount = 10000, apy = 45, farmingDays = 30. Apply the formula: Earnings = 10000 × (45 / 100) × (30 / 365) = 10000 × 0.45 × 0.08219 ≈ $369.86. Over 30 days at 45% APY, you would earn approximately $369.86 on a $10,000 position, before accounting for gas fees and impermanent loss.
Frequently asked questions
How do I calculate my expected returns from DeFi yield farming?
Expected yield farming returns are estimated with the formula: Earnings = liquidityAmount × (apy / 100) × (farmingDays / 365). You input the USD value of liquidity you provide, the advertised APY of the pool, and the number of days you intend to farm. The formula scales the annual rate to your specific farming window. Keep in mind that advertised APYs in DeFi can change daily as more liquidity enters or leaves a pool, so this figure is a snapshot estimate. For more accurate projections, monitor the pool's APY regularly and recalculate throughout the farming period.
What is impermanent loss and how does it affect DeFi yield farming earnings?
Impermanent loss occurs when the price ratio of the two tokens in a liquidity pool changes after you deposit them, resulting in a lower dollar value of your position compared to simply holding the tokens. It is called 'impermanent' because if prices return to their original ratio, the loss disappears. However, if you withdraw while prices are divergent, the loss becomes permanent. The yield farming rewards you earn may partially or fully offset impermanent loss, which is why high-APY pools often exist for more volatile pairs. This calculator does not account for impermanent loss, so real returns may be lower than estimated, particularly in volatile markets.
Why does DeFi yield farming APY fluctuate so much compared to traditional savings accounts?
DeFi APYs are determined algorithmically by the protocol based on trading volume, total liquidity in the pool, and token emission schedules — all of which change continuously. When a pool is newly launched or has high demand, APY can be extremely high; as more capital flows in, returns are diluted. Token reward emissions, which often make up a large share of DeFi yield, also decrease over time as protocols reduce inflation. Traditional savings accounts, by contrast, offer rates set by banks in response to central bank policy, which changes infrequently. This dynamic nature means DeFi yields require active monitoring and cannot be treated as fixed income.