Yield Farming Calculator

Yield farming returns advertised by a protocol are gross yields under ideal conditions — they don't account for impermanent loss, gas fees, reward token volatility, or compounding frequency. Real returns end up notably different from the headline APR, and figuring out by how much is its own arithmetic project.

This calculator takes principal, advertised APR, expected reward token price changes, gas costs per harvest, and compounding frequency, then returns net APY after all of those factors. It also breaks out the impermanent-loss component for liquidity-pool positions, which is the variable that surprises new farmers most.

Results are only as accurate as your assumptions about token prices and pool composition. The math is mechanical; the inputs are guesses. Treat the output as a sanity check on the worst-case scenario, not a return forecast.

The math behind realistic yields is multi-stage. Start with the advertised APR, which is typically expressed in the reward token. Compound at your harvest frequency to convert to APY: APY = (1 + APR/n)^n − 1, where n is harvests per year. Subtract gas costs scaled to your principal — a $10 gas fee on a $1000 position is an instant 1% drag. Apply expected reward token price change (a token down 50% halves your yield even if the unit count is unchanged). For LP positions, subtract impermanent loss based on your assumed price divergence between the pooled assets. The calculator chains all of these; doing it by hand is feasible but error-prone, and the errors compound.

Worked example: $10K in an LP earning 80% APR on a reward token, monthly compounding, $5 gas per harvest, expected reward token price flat, expected pool divergence 20% (BTC up 20% relative to ETH over the period). 80% APR compounded monthly ≈ 119% APY. Gas: 12 harvests × $5 = $60 = 0.6% drag. Reward token flat = no adjustment. IL on 20% divergence ≈ 0.62%. Net: ~118% APY. Now redo with reward token down 30% — that turns ~119% gross APY into ~83% net, and IL erosion of 0.6% takes it to ~82%. The headline 80% APR became 82% real return, which is the kind of "still good but not what was advertised" outcome the math is designed to expose.

The number people most consistently underestimate is impermanent loss in volatile asset pairs. For a 50/50 LP, IL is roughly 0.5 × (price ratio change)² for small changes. A 50% divergence (one asset doubled relative to the other) costs about 5.7%. A 4x divergence costs 20%. In bull markets where one asset of the pair runs hard, IL can exceed the entire reward APR, leaving farmers worse off than just holding both tokens. The calculator's IL line is the single most important output for LP positions.

And a structural caveat: every yield farm with above-market APR is paying out new tokens that haven't yet been priced into the market. When farmers harvest and sell, they suppress the reward token's price. Real-world yield over a long enough horizon converges toward whatever the market rate is for the underlying risk; protocols offering 1000% APR are usually paying it in tokens that quickly depreciate. Treat headline APRs above ~20% with skepticism unless the underlying mechanism is clearly explained.