Yield Farming Optimizer
Compare yields across 50+ DeFi protocols. Calculate returns with auto-compounding, assess risk factors, and find the best strategy for your investment goals.
Calculator Inputs
~1.0 years
Ethereum
$1200M
DEX
Bug Bounty
Low-risk stablecoin pool with minimal IL
Monthly compounding
Ethereum: ~$10-30 | L2s: ~$1-5
What is Yield Farming?
Yield farming is the practice of depositing cryptocurrency into DeFi protocols to earn returns. These returns come from various sources including trading fees, interest payments, and protocol reward tokens.
Unlike traditional savings accounts, yield farming offers significantly higher potential returns but also comes with additional risks such as smart contract vulnerabilities, impermanent loss, and token price volatility.
Types of Yield Farming:
- DEX Liquidity Provision: Earn trading fees by providing liquidity to AMM pools
- Lending Protocols: Earn interest by lending assets to borrowers
- Yield Aggregators: Auto-compound rewards and optimize across multiple protocols
- Liquid Staking: Stake ETH/other assets while maintaining liquidity
How to Use This Calculator
- 1.Enter your investment amount and time horizon. Consider starting small if you're new to DeFi.
- 2.Select a protocol from the dropdown. Protocols are grouped by blockchain. Each shows APY, type, and TVL.
- 3.Configure compounding frequency. More frequent compounding increases returns but costs more in gas fees. Auto-compound vaults handle this for you.
- 4.Set gas price based on your chain. Ethereum typically costs $10-30 per transaction, while L2s are $1-5.
- 5.Choose risk tolerance. This adjusts recommendations and highlights appropriate protocols.
- 6.Review results including final value, risk assessment, and fee breakdown. Use "Compare Protocols" to see alternatives.
How to Choose the Best Yield
The "best" yield depends on your goals and risk tolerance. Here's what to consider:
Conservative (3-8% APY)
- ✓ Audited protocols with >1 year track record
- ✓ High TVL (>$100M)
- ✓ Stablecoin pools (no impermanent loss)
- ✓ Examples: Curve 3pool, Lido stETH, Yearn USDC
Moderate (8-20% APY)
- ✓ Established protocols (6+ months)
- ✓ Medium TVL ($50M-$500M)
- ✓ Correlated asset pairs (ETH/wstETH)
- ✓ Examples: Convex, Aura, GMX GLP
Aggressive (20-50%+ APY)
- ⚠️ New protocols or chains
- ⚠️ Lower TVL (<$50M)
- ⚠️ Volatile asset pairs
- ⚠️ Examples: PancakeSwap V3, Trader Joe
Key Metrics to Check
- 📊 TVL trend (growing or shrinking?)
- 🔒 Audit status and security track record
- 💰 Fee structure (deposit, withdrawal, performance)
- ⏰ Contract age (newer = riskier)
- 📈 APY sustainability (is it realistic?)
Risk Management Tips
Yield farming carries significant risks. Follow these best practices to protect your capital:
⚠️ Common Risks
- Smart Contract Risk: Bugs or exploits in protocol code
- Impermanent Loss: Loss from price divergence in LP pools
- Rug Pulls: Malicious developers draining funds
- Liquidation: Collateral seized if borrowing with leverage
- Token Inflation: Reward tokens losing value from high emissions
- Bridge Risk: Cross-chain bridges can be compromised
Understanding Auto-Compounding
Auto-compounding vaults automatically reinvest your rewards, maximizing returns through the power of compound interest. Here's how they compare to manual compounding:
| Feature | Manual | Auto-Compound |
|---|---|---|
| Compound Frequency | Weekly/Monthly | Daily/Multiple times per day |
| Gas Costs | You pay each time | Shared across all users |
| Effort Required | High (manual transactions) | Zero (set and forget) |
| Performance Fee | 0% | 5-20% of profits |
| Best For | Large positions on cheap chains | Small-medium positions, Ethereum |
💡 When to Use Auto-Compound Vaults
- ✓ Position size < $10,000 on Ethereum
- ✓ You want passive income without active management
- ✓ Gas costs would eat into manual compounding profits
- ✓ Protocol offers mature vault with good track record (Beefy, Yearn, Convex)