Yield Farming Calculator — DeFi APY, Rewards, and Real Net Returns
Calculate yield farming returns including gas costs, impermanent loss estimates, and reward token price scenarios. See actual net APY after all DeFi costs.
DeFi protocols advertise eye-catching APY numbers — 50%, 200%, sometimes 1,000%+. The reality after gas fees, impermanent loss, reward token depreciation, and the mechanics of compounding is usually far more modest. The CalcHub Yield Farming Calculator helps you model realistic net returns before committing capital to any farming strategy.
The Components of Yield Farming Returns
Total yield from a farming position typically comes from multiple sources:
- Trading fees — your share of swap fees from the liquidity pool (typically 0.05–0.3% of each trade, proportional to your pool share)
- Liquidity mining rewards — protocol native tokens distributed as incentives (the flashy APY number)
- Minus: Impermanent loss — value reduction from price divergence in volatile pairs
- Minus: Gas fees — entering, exiting, compounding, and claiming rewards
- Minus: Reward token price depreciation — farming rewards paid in new tokens that often decline in value
Net APY Formula
Net APY = Trading Fee APY + Reward APY × Price Retention % − IL% − Gas Cost %This is why a 200% APY farm often delivers 20–40% actual returns in practice.
How to Use the Calculator
- Enter deposit amount (USD or INR value)
- Enter advertised APY breakdown (fee APY vs reward APY)
- Enter reward token current price and your expected price retention
- Enter gas cost to enter and exit (based on network and transaction complexity)
- Enter holding period and compounding frequency
- Get: gross APY, estimated IL (for volatile pairs), gas cost %, net APY, and projected earnings
Real Example: ETH/USDC Farm on Arbitrum
| Input | Value |
|---|---|
| Deposit | $5,000 |
| Pool trading fee APY | 8% |
| Reward token APY | 45% |
| Reward token price retention | 60% (token expected to drop 40%) |
| Estimated IL over 3 months | 3% annualized |
| Gas to enter + exit (Arbitrum) | $3 total |
Still respectable at 32%, but very different from 53% advertised. And if the reward token drops 80% instead of 40%:
Net APY: 8% + 9% (45% × 0.20) − 3% − 0.2% = ~13.8%Price assumptions for the reward token drive the final number more than anything else.
The Reward Token Problem
Most yield farming rewards come in the protocol's native governance token. These tokens typically:
- Have high inflation (lots of tokens being minted for rewards)
- Have limited buy pressure unless the protocol has strong revenue
- Decline in price over time as farmers sell rewards immediately ("mercenary capital")
The honest way to evaluate a farming opportunity: assume reward tokens are worth 50% of current price at the time you realize them. If the farm is still attractive at half the reward token price, it's worth considering.
Protocol Risk
Beyond financial math, yield farming involves smart contract risk:
- Exploit risk: DeFi hacks have cost billions. Older, audited protocols (Uniswap, Aave, Curve) have better track records
- Rug pull risk: new, unaudited projects promising ultra-high APY are often scams
- Oracle manipulation: protocols using price oracles can be exploited through flash loan attacks
Position sizing should reflect the risk tier of the protocol: more established protocols can support larger allocations than new, unaudited ones.
Compounding Frequency
On chains with low gas (Arbitrum, Base, Polygon), frequent compounding makes sense. On Ethereum mainnet, compounding has a high gas cost that erodes the benefit.
Daily compounding (Arbitrum, gas ~$0.10): nearly continuous compounding, very efficient Weekly compounding (Ethereum, gas ~$15): need large position to justify weekly gasBreak-even position size for weekly Ethereum compounding at 30% APY: approximately $25,000+ deposit.
Is yield farming still worth it in 2026?
It depends on the protocol and your capital size. The mega-APY farms of 2021 are largely gone — sustainable yield from established protocols runs 5–30% APY. For large capital (> $50K), even 10–15% net APY from established, audited protocols like Uniswap or Curve is worth considering. For smaller amounts, gas friction makes many strategies marginal.
What's the difference between APY and APR in DeFi?
APR (Annual Percentage Rate) doesn't include compounding. APY (Annual Percentage Yield) includes the effect of compounding at a stated frequency. DeFi protocols sometimes show APR; their displayed APY assumes daily compounding. Check which metric is being displayed and manually calculate with your actual compounding frequency.
How do I find legitimate yield farming opportunities?
Stick to protocols with: 1+ year of operation without major exploits, multiple security audits from reputable firms (Trail of Bits, OpenZeppelin, Certik), significant TVL (total value locked — higher TVL means more scrutiny from white-hat auditors), and transparent, doxxed teams. DefiLlama is a useful resource for tracking TVL, yields, and protocol health across chains.