◈ DeFi Tool
DeFi Yield Calculator – Estimate Staking, Compound Yield & Impermanent Loss Free
Free DeFi yield calculator for staking rewards, compound interest, APR to APY conversion & impermanent loss. Educational estimates only — not financial advice.
Educational tool only. All results are mathematical estimates based on your inputs. DeFi rates fluctuate constantly and past yields do not guarantee future returns. This is not financial or investment advice. Always do your own research (DYOR) before participating in any DeFi protocol.
Principal Amount
$10,000
$1k
$5k
$10k
$50k
$100k
APR %
10.00%
3%
5%
10%
20%
50%
100%
Duration (Days)
365 days
7d
30d
90d
180d
1yr
2yr
ESTIMATED YIELD
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APY: --% • -- days
Principal
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APR
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Total Yield
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Final Value
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Duration
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Daily Yield
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📊 Projected Yield by Period (Simple)
Daily
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Weekly
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Monthly
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Yearly
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📖 How to Use the DeFi Yield Calculator
Four modules cover the most common DeFi yield calculations. All results are mathematical projections assuming a constant rate — actual DeFi returns depend on market conditions, protocol risks, and token prices.
1
Staking / Lending Yield
Enter deposit amount, APR, and duration in days. Uses simple interest: Principal × APR × Days/365. Shows daily, weekly, monthly, and yearly projections. Best for fixed-rate staking or lending protocols where you do not reinvest rewards.
2
Compound Yield
Enter principal, APR, years, and compounding frequency. Formula: FV = P × (1 + r/n)^(n×t). Also calculates effective APY so you can compare protocols on equal terms. Use Daily for DeFi auto-compounders.
3
APR to APY Converter
Converts between APR and APY for any compounding frequency. A 100% APR compounded daily = 171.5% APY — a large difference. Also converts APY back to APR if you need the base rate.
4
Impermanent Loss
Enter LP deposit, initial token price, and new token price. Formula: IL% = (2√r)/(1+r) − 1 where r = new/initial price. Shows LP value, HODL value, and the exact currency amount lost to IL.
5
APR vs APY — Why It Matters
APR is the simple base rate. APY includes compound reinvestment. When comparing a 50% APR protocol vs a 60% APY protocol, the APY protocol is actually lower — 50% APR daily = 64.8% APY. Always compare using the same metric.
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Key Limitations
This calculator assumes a constant APR throughout the period. In reality DeFi rates fluctuate constantly. It also does not model: token price changes, gas costs, protocol fees, or smart contract risks. Treat all results as rough directional estimates only.
💡 DeFi Yield Tips
- DeFi APR rates fluctuate constantly. A 200% APR today may drop to 30% in a week as more capital enters the pool. Never assume rates are stable.
- Impermanent loss only becomes permanent when you withdraw. If token prices return to their entry ratio, IL fully disappears.
- Auto-compounders charge performance fees (typically 2%–20% of yield). Subtract this when comparing against manual compounding.
- DeFi yield income is taxable in most jurisdictions including the USA, UK, and Australia. Consult a tax professional about your specific obligations.
- Never invest more than you can afford to lose entirely. Smart contract bugs and protocol exploits have caused total loss of funds across many DeFi platforms.
📚 DeFi Yield Concepts Explained
Understanding these fundamentals helps you interpret yield estimates accurately and recognise the real risks involved in DeFi participation.
Staking Rewards
Staking locks tokens in a smart contract to support network validation or protocol governance. Stakers receive a share of protocol fees or newly minted tokens. Rates are quoted as APR. Risks include smart contract vulnerability and token price decline.
Liquidity Provision
Liquidity providers deposit two tokens of equal value into an AMM pool and earn a share of trading fees. The primary additional risk versus simply holding is impermanent loss when token prices diverge significantly from the entry ratio.
Lending Protocols
Deposit assets to earn variable interest paid by borrowers. Rates adjust algorithmically based on pool utilisation. Risks include smart contract bugs, under-collateralised loan cascades affecting pool solvency, and highly variable rates.
Compounding in DeFi
Reinvesting earned rewards back into the position generates compound growth. Auto-compounding vaults do this automatically, often multiple times per day, in exchange for a performance fee. The effective APY from daily compounding is always higher than the stated APR.
Impermanent Loss
IL occurs in AMM pools when the price ratio of deposited tokens changes. The pool constantly rebalances: it sells the rising token and buys the falling one. A 2x price move causes ~5.7% IL; a 5x move causes ~25.5% IL relative to holding both tokens.
APR vs APY
APR = simple annual rate with no compounding. APY = (1 + APR/n)^n − 1, where n = compounding periods per year. A 50% APR compounded daily = 64.82% APY. Always convert to APY when comparing protocols to get an accurate like-for-like comparison.
📊 Impermanent Loss Reference Table
| Price Change | IL % | LP Value ($10k) | HODL Value | Loss vs HODL |
|---|---|---|---|---|
| No change (1x) | 0% | $10,000 | $10,000 | $0 |
| +25% (1.25x) | -0.60% | $9,940 | $11,250 | -$60 |
| +100% (2x) | -5.72% | $9,428 | $15,000 | -$572 |
| +400% (5x) | -25.46% | $7,454 | $30,000 | -$2,546 |
| +900% (10x) | -42.50% | $5,750 | $55,000 | -$4,250 |
| -50% (0.5x) | -5.72% | $9,428 | $7,500 | +$1,928 vs HODL |
*Standard 50/50 AMM (Uniswap v2 model). No fee income included. Concentrated liquidity pools have different IL profiles.
⚠ DeFi Risks You Must Understand
DeFi carries significant risks that are unique to decentralised systems. Understanding these risks before participating is essential — not optional.
1
Smart Contract Risk
DeFi protocols run on smart contracts. Bugs or vulnerabilities can be exploited by attackers, potentially draining all deposited funds. No insurance or central authority can reverse losses. Always verify a protocol has multiple independent security audits before depositing.
2
Token Price Risk
Even a high APY can be outpaced by token price decline. Earning 100% APR in a token that falls 80% results in a net loss. Always evaluate yield relative to the underlying asset's price risk and whether reward tokens have sustainable value.
3
Impermanent Loss
As illustrated in this calculator, when token prices diverge in an AMM pool you receive less total value than simply holding. Trading fees may partially offset IL in high-volume pools, but large price moves can create losses that fees do not cover.
4
Liquidity and Exit Risk
Some protocols have lock-up periods, withdrawal queues, or insufficient liquidity to allow timely exit. During market stress, protocols may pause withdrawals entirely. Always understand the withdrawal mechanics before depositing significant capital.
5
Oracle and Governance Risk
Many protocols rely on price oracles which can be manipulated. Governance attacks using accumulated voting power can pass malicious proposals. Even well-audited protocols have lost funds through oracle manipulation and governance exploits.
6
Regulatory Risk
DeFi regulation is evolving rapidly worldwide. Protocols may face enforcement action, and certain DeFi activities may be restricted or taxable in your jurisdiction. DeFi yield income is taxable in most countries. Regulatory changes can affect protocol access and value overnight.
⚠ Important Disclaimers
- This calculator is for educational and informational purposes only. It is not financial, investment, legal, or tax advice.
- All estimated yields are mathematical projections assuming a constant APR. Real DeFi rates fluctuate constantly and can change drastically within hours.
- Past yield rates on any DeFi protocol do not guarantee future performance. Token prices and protocol incentives change continuously.
- DeFi investments carry risk of total loss of principal. Only use funds you can afford to lose entirely.
- Always consult a qualified financial advisor and tax professional before making any investment or yield farming decision.
- ToolsInstant.com does not endorse, recommend, or affiliate with any specific DeFi protocol, token, blockchain network, or investment strategy.
❓ Frequently Asked Questions
Common questions about DeFi yields, APR vs APY, impermanent loss, and calculator usage.
What is the difference between APR and APY in DeFi?
APR (Annual Percentage Rate) is the base annual rate without compounding. APY (Annual Percentage Yield) includes the effect of reinvesting earned rewards. Formula: APY = (1 + APR/n)^n − 1, where n = compounding periods per year. A 50% APR compounded daily = 64.82% APY. Always convert to the same metric when comparing different protocols.
What is impermanent loss and when does it occur?
Impermanent loss occurs when you provide liquidity to an AMM pool and the price ratio of the two deposited tokens changes. The AMM automatically rebalances, leaving you with more of the declining token. Formula for a 50/50 pool: IL% = (2 x sqrt(r)) / (1 + r) − 1, where r = new price / initial price. The loss is "impermanent" because it disappears if prices return to the original ratio.
How is simple staking yield calculated?
Simple yield = Principal x (APR/100) x (Days/365). For example, staking $10,000 at 10% APR for 90 days: $10,000 x 0.10 x (90/365) = $246.58. This is interest without reinvestment. For compound growth, use the compound yield module which applies FV = P x (1 + r/n)^(n x t).
Is DeFi yield income taxable?
In most countries yes. In the USA, the IRS treats staking rewards and yield farming income as ordinary income at fair market value when received. The UK, Australia, Canada, and Germany have similar treatment. Tax rules for DeFi are still evolving. Always consult a qualified tax professional who specialises in cryptocurrency before earning yield.
Can I trust the APR rates shown in DeFi protocols?
APR/APY rates displayed on DeFi protocols are real-time estimates based on current conditions. They can change significantly — sometimes within hours — as capital flows in or out, token emissions are adjusted, or trading volume changes. Never assume a high current rate will persist. This calculator's results are only as accurate as the APR you enter.
What is the compound interest formula used here?
Future Value = Principal x (1 + APR/100/n)^(n x years), where n is compounding periods per year: 1 (yearly), 12 (monthly), 52 (weekly), 365 (daily). Profit = FV − Principal. Effective APY = (1 + APR/100/n)^n − 1. This is the standard compound interest formula used globally in finance.
Does impermanent loss mean you always lose money?
No. Impermanent loss is the loss compared to simply holding (HODLing) the tokens. Even with IL, your absolute value can still be higher than your deposit if the underlying tokens appreciated enough. Also, trading fee income earned by the pool can offset IL. The "impermanent" label means if prices return to entry levels, IL disappears entirely.
Does higher compounding frequency always give more yield?
Yes, but the marginal benefit decreases at higher frequencies. Going from yearly to monthly compounding makes a meaningful difference. Going from daily to hourly adds very little. On 10% APR: yearly compounding = 10% APY; monthly = 10.47%; daily = 10.52%. At higher APRs the gap is more meaningful but still not dramatic.
Are all DeFi protocols equally risky?
No. Risk varies enormously. Lower-risk indicators include: multiple independent audits, long track record with no exploits, transparent team, conservative design, and use of established codebases. Very high APRs above 100% are usually driven by temporary token emissions that often decline rapidly in value. Higher yields almost always indicate higher risk — there is no free lunch in DeFi.
Can this calculator be used for non-Ethereum DeFi?
Yes. The maths is identical for all blockchain networks: Solana, BNB Chain, Avalanche, Polygon, Arbitrum, and others. Simply enter the APR from whichever protocol you are evaluating. The formulas for compound interest, APR-to-APY conversion, and impermanent loss are universal and chain-agnostic.
Why is this tool labelled as educational and not financial advice?
This calculator provides mathematical estimates based solely on user inputs. It cannot account for fluctuating rates, token price changes, gas fees, smart contract risks, liquidity constraints, or regulatory changes. Financial advice requires a full understanding of your personal financial situation, goals, and risk tolerance, which only a qualified professional can provide.
What is auto-compounding and how does it affect yield?
Auto-compounding vaults automatically reinvest earned rewards back into the position multiple times daily, converting APR into near-APY returns. They save gas costs versus manual compounding. However, they charge a performance fee (typically 2%–20% of yield). Subtract this fee when comparing auto-compound APY against a simple staking APR to get a fair comparison.
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