Comprehensive Guide
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How it works
defi yield farming calculator takes your inputs and produces initial position value, farming rewards earned, impermanent loss, final position value, net return (%). Calculate returns from DeFi yield farming — LP tokens, staking, and liquidity provision. You provide 6 inputs: Token A amount (currency, in dollars) (default: 5000 dollars); Token B amount (currency, in dollars) (default: 5000 dollars); Farming APY (%) (percent, in percent) (default: 25 percent); Token A price change (%) (percent, in percent) (default: 20 percent); Token B price change (%) (percent, in percent) (default: -10 percent); Farming period (days) (number) (default: 90). The calculator returns 5 outputs: Initial position value (a secondary output); Farming rewards earned (a secondary output); Impermanent loss (a secondary output); Final position value (a secondary output); Net return (%) (the primary result). Investment calculations rest on a few variables — principal, return rate, time, and compounding — but their interaction is non-linear enough that intuition alone gets the answer wrong more often than not. This tool runs the real formula with your inputs and shows the numbers that matter, not the rounded approximations from a textbook. The underlying formula: IL = 2 × √(price ratio) ÷ (1 + price ratio) − 1. Net return = Farming rewards − IL + Price appreciation. With the default values, net return (%) is computed from the interaction of every input field — change any one of them and the result updates immediately, so you can stress-test different scenarios without re-entering the whole form. Adjust the inputs to match your real financial situation. The defaults are realistic starting points, but every person's circumstances differ — your actual income, expenses, rates, and timelines will produce a different answer. Use the tool iteratively: start with the defaults, then change one variable at a time to see which factor has the largest impact on your outcome.Formula
IL = 2 × √(price ratio) ÷ (1 + price ratio) − 1. Net return = Farming rewards − IL + Price appreciation.
Tips
- Impermanent loss is zero when both tokens move the same direction by the same percentage.
- IL is maximized when one token goes up 5x and the other stays flat.
- Yield farming APY includes IL risk — the true return may be much lower.
- Stablecoin pairs (USDC/USDT) have zero IL but lower APY.
Frequently asked questions
What is impermanent loss?
Impermanent loss is the value lost compared to just holding the tokens. If you provide ETH/USDC liquidity and ETH doubles, the pool sells some ETH for USDC, leaving you with less ETH than if you had just held. The loss becomes "permanent" when you withdraw.
Is yield farming profitable?
It depends on APY, price movements, and IL. If rewards exceed IL + gas fees, it is profitable. Stablecoin pairs minimize IL. High-APY farms with volatile pairs often lose to IL despite attractive yields.
How accurate are the calculator results?
The math is exact — the same formulas a financial professional would use by hand. The precision of the output depends entirely on how realistic your inputs are. Use your actual numbers rather than estimates when possible. The defaults are reasonable starting points, but your real income, rates, and timeline will produce a different result.