Liquidity Mining ROI Calculator
Liquidity mining pays you a share of trading fees plus, often, an incentive token reward for depositing assets into a decentralized exchange pool. The headline APR can look attractive, but your real return depends on how long you stay, how much capital you commit, and how much impermanent loss the position suffers. This calculator combines a reward APR and a fee APR, prorates them over your holding period using simple interest, then subtracts your estimated impermanent loss to show gross yield, the impermanent loss cost, and net ROI in both dollars and percent.
Liquidity mining ROI formula
Combined APR = reward APR + fee APR
Gross yield = deposit * (combined APR / 100) * (days / 365)
IL cost = deposit * (impermanent loss % / 100)
Net profit = gross yield - IL cost
Net ROI % = net profit / deposit * 100
APR is treated as simple interest prorated by days over 365. Impermanent loss is applied to the deposit principal. If you auto-compound rewards, your effective return will exceed the simple-interest figure shown.
Things to know
- APR figures should come from the protocol's own live dashboard; reward token prices are volatile and not fixed truths.
- Impermanent loss depends on the price path of both pool assets and is entered as your own estimate.
- Gas and bridge fees to enter and exit a position are not included; add them to your cost basis separately.
- Rewards may be taxable as ordinary income at fair market value when received under IRS digital asset rules.
- A high APR over a short window can still be a loss if impermanent loss or reward token depreciation is large.
Liquidity mining ROI: frequently asked questions
What is liquidity mining ROI?
Liquidity mining return on investment is the net percentage gain on capital you deposit into a liquidity pool, combining the trading fees earned, any incentive token rewards, and the change in value of the deposited assets, less impermanent loss. This calculator estimates the reward and fee component over your chosen holding period; the underlying asset price move and impermanent loss are separate user inputs.
How is APR converted to a holding-period return?
APR is a simple annual rate. For a holding period of D days, the simple-interest return is APR times D divided by 365. This calculator sums your reward APR and fee APR, then prorates that combined APR over your holding period. APR does not assume compounding; if rewards are auto-compounded, the effective APY is higher.
Does this account for impermanent loss?
Yes, as a user-editable input. Impermanent loss is the value a liquidity position loses relative to simply holding the two assets when their relative price changes. Because it depends on the specific price path of both pool assets, it cannot be assumed; enter your own estimated impermanent loss percentage. The calculator subtracts it from gross yield to show net ROI.
Why are reward token prices not fixed?
Incentive token prices are volatile and cannot be sourced as a fixed truth, so this tool expresses rewards as an APR you supply, typically taken from the protocol's own live dashboard. If the reward token falls in price, your realized APR will be lower than the headline figure shown when you entered the pool.
Are liquidity mining rewards taxable?
In the United States the IRS treats digital assets received as rewards as property; the fair market value when you gain control is generally ordinary income, and later disposal is a capital gain or loss. This calculator does not compute tax. Consult the IRS digital assets guidance and a tax professional for your situation.
Official sources
- U.S. Internal Revenue Service: Digital Assets.
- U.S. Commodity Futures Trading Commission: CFTC on digital asset markets.
Reviewed by the CalculatorHub team, edited by James Graham, 17 June 2026. See our methodology.