Yield Farming APY Calculator
Convert a farm’s advertised APR into the true APY once rewards are auto-compounded, and see the projected end-of-year balance.
How it works
APY = (1 + APR ÷ n)ⁿ − 1 · where n = compounding periods per year
Farms usually quote APR (simple annual rate), but auto-compounding vaults reinvest rewards continuously, so the rate you actually earn is the APY. The more often rewards compound, the larger the gap — daily compounding of a 40% APR pushes the effective yield past 49%. Remember these rates assume the reward token’s price and the farm’s emissions hold steady, which in practice they rarely do.
Worked example
Deposit $5,000 at a 40% APR compounded daily (n = 365): APY = (1 + 0.40 ÷ 365)³⁶⁵ − 1 = 49.15%. After one year the balance is about $7,457, of which $2,457 is rewards.
Frequently asked questions
What is the difference between APR and APY?
APR is the simple annual rate with no compounding. APY includes the effect of reinvesting your rewards over the year. Since most DeFi vaults auto-compound, APY is the number that reflects what you actually keep.
Why do higher compounding frequencies raise the APY?
Each time rewards are added to your principal, the next period earns interest on a slightly larger base. Compounding daily instead of monthly captures more of these small gains, so the effective yield rises even though the APR is unchanged.
Are these APYs sustainable?
Rarely at the extremes. Very high APYs are usually paid in a farm’s own emission token, whose price tends to fall as more is minted. Treat quoted APYs as a snapshot, not a guarantee.
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Educational estimate for crypto/DeFi mechanics — token prices are volatile and yields are not guaranteed. Not financial or tax advice.