Yield Farming APY Calculator
Yield farming pays a reward rate that compounds each time you harvest and reinvest, so the effective annual yield (APY) exceeds the simple advertised APR. The conversion is the standard compounding formula: more frequent reinvestment lifts the APY for the same APR. This calculator takes the reward APR, the compounding frequency, your deposit, and the holding period, then returns the effective APY, the projected end value, and the total earnings, so you can see how much the compounding cadence actually adds.
Yield farming APY formula
Periodic rate = (APR / 100) / periods per year
Effective APY = ((1 + periodic rate) ^ periods per year - 1) * 100
End value = deposit * (1 + periodic rate) ^ (periods per year * years)
Total earnings = end value - deposit
Use daily compounding (365) for auto-compounding vaults, 12 for monthly manual harvests, or 1 for simple APR with no reinvestment. The advertised APR should be the net rate you actually receive.
Using the result
- Higher compounding frequency raises APY, but each harvest costs a gas fee that can offset the gain.
- Advertised farm rates often decline as more capital enters; treat the APR as a moving input.
- The figures are nominal yield only and ignore impermanent loss and token price risk.
- Convert token rewards to a stable value to compare farms denominated in different tokens.
- Re-run the numbers regularly as the reward rate changes.
Yield farming APY: frequently asked questions
What is the difference between APR and APY in yield farming?
APR is the simple annual rate with no compounding. APY is the effective annual yield once rewards are harvested and reinvested. Because yield farmers can compound frequently, APY is usually higher than APR, and the gap widens the more often you reinvest.
How do you convert farming APR to APY?
APY equals one plus the APR divided by the number of compounding periods, raised to the power of the number of periods, minus one. With daily compounding that is one plus APR over 365, to the power 365, minus one. More frequent compounding increases the APY for a given APR.
How often should I compound a yield farm?
It depends on gas costs versus the marginal yield from compounding more often. Each harvest-and-reinvest transaction costs a network fee, so very frequent compounding can cost more than it adds. Compare the extra APY from a higher frequency against the cumulative gas cost before choosing.
Are the headline APYs on farms reliable?
Often not. Many advertised farm APYs assume continuous compounding at a reward rate that may fall as more capital enters the pool or as token incentives taper. Treat any advertised rate as a moving, user-editable input, not a fixed return, and re-run the numbers as conditions change.
Does this calculator include impermanent loss or token price risk?
No. This tool converts a reward APR into a compounded APY and a projected balance only. Yield farming in a liquidity pool also carries impermanent loss and token price risk, which can erase nominal yield. Use the impermanent loss calculator alongside this one for a fuller picture.
Official sources
- Ethereum.org: Decentralized finance and yield.
- U.S. SEC Investor.gov: Compound interest and APY.
Reviewed by the CalculatorHub team, edited by James Graham, 17 June 2026. See our methodology.