About the Yield Farming APY Calculator
This yield farming calculator converts the APR a DeFi pool or vault advertises into the APY you actually earn when rewards are harvested and re-deposited. Choose how often you compound, how long you stay in, and what each harvest-and-restake costs in gas, and it projects your ending balance, net earnings and effective APY.
It is built for liquidity providers, vault users and anyone comparing a "40% APR" farm with a "45% APY" one. Those two numbers are not directly comparable — APY already includes compounding — and on small positions the gas spent compounding can wipe out the benefit entirely. The calculator shows both effects side by side and tells you which frequency gives the best net result.
It assumes the APR, token prices and your deposit stay constant. Real farm rewards change daily and are often paid in a volatile token, and liquidity-pool positions also face impermanent loss, so treat the result as a best-case projection.
With the default inputs, the apy (before gas) is 49.15%. Change any value above to recalculate instantly.
How to use the yield farming apy calculator
- 1Enter how much you deposit into the farm or vault.
- 2Enter the APR shown by the protocol (not the APY).
- 3Pick how often you will harvest and restake rewards.
- 4Enter how long you plan to stay and what one compound costs in gas.
- 5Compare net earnings and effective APY across frequencies to find the sweet spot.
Formula and method
APR is the simple yearly reward rate; APY includes the effect of re-depositing rewards n times a year. The headline APY uses the standard conversion (1 + APR/n)^n − 1 and ignores costs.
The projection steps through each compounding period: the balance grows by APR/n and then the cost of the harvest-and-restake transaction (g) is subtracted. Any leftover part of a period at the end earns simple interest. Effective APY after gas annualizes the actual ending balance, (ending ÷ deposit)^(365/days) − 1, so you can compare strategies of different lengths.
- APR
- Annual percentage rate as a decimal
- n
- Compounds per year (365 daily, 52 weekly, 12 monthly…)
- B
- Balance after each compound
- g
- Gas and fees paid per compound
Worked examples
$10,000 at 40% APR, daily compounding on an L2
Daily compounding turns 40% APR into 49.15% APY. Paying $0.20 for each of 365 compounds costs $73, so the balance ends near $14,825 — about $825 more than the $4,000 you would earn without compounding.
$5,000 at 25% APR, weekly for 180 days, $1 gas
180 days is 25 full weekly compounds (plus part of a week). Weekly compounding at 25% APR is 28.33% APY; after $25 of gas the balance reaches about $5,628, beating simple interest by roughly $11.
Small position, expensive gas
The 60% APR looks like 82% APY with daily compounding, but paying $1 a day in gas on a $1,000 position costs $365. You finish with about $1,322 — an effective 32% APY, well below the $600 simple interest you would get by not compounding at all.
Frequently asked questions
What is the difference between APR and APY in DeFi?+
APR is the simple yearly rate without reinvesting rewards. APY assumes rewards are reinvested at a given frequency, so it is always equal to or higher than APR. A 40% APR compounded daily is about 49% APY.
How often should I compound my farm rewards?+
Compound when the extra yield exceeds the transaction cost. On cheap L2 networks daily can make sense; on Ethereum mainnet with a small position, weekly or monthly usually wins. The calculator notes which frequency gives the best net result.
Are yield farming APYs guaranteed?+
No. Farm APRs change constantly with pool size, emissions and the price of the reward token. A high APR paid in a token that falls 50% can leave you with a loss, and pool positions also carry impermanent-loss and smart-contract risk.
Do auto-compounding vaults do the same thing?+
Yes. Vaults harvest and restake for many users at once, spreading gas across depositors, but they usually charge a performance fee. Model a vault by setting gas to zero and reducing the APR by the fee.
Is yield farming income taxable?+
In many countries, including the US, reward tokens are generally treated as income when received and later disposals may trigger capital gains. Rules vary by country, so check your tax authority's guidance.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.
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