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DeFi APY Calculator

Convert APR to APY to calculate compounding decentralized finance returns.

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Calculation Parameters

Specify your inputs below.

Calculated Result

Effective APY (%) 28.39%
Projected Annual Earnings $2,839.26
Total Value After 1 Year $12,839.26
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Expert Tip

Daily compounding (365x/year) typically yields the highest APY. Some DeFi protocols auto-compound, effectively giving you a higher yield than the advertised APR.

How this Calculator Works

This calculator converts Nominal APR (Annual Percentage Rate) to Effective APY (Annual Percentage Yield) for Decentralized Finance (DeFi) liquidity pools, yield farms, and lending protocols. It highlights the impact of compounding frequencies.

Formula & Methodology

APY = [ (1 + APR / n)^n - 1 ] * 100 - APR is the base annual interest rate. - n is the number of compounding periods per year.

Step-by-Step Calculation Example

Here is a step-by-step example showing how the calculations are performed:

A DeFi liquidity pool offers a 12% APR, compounding daily (365 times per year). 1. Divide APR by compounding periods: 0.12 / 365 = 0.0003287. 2. Add 1 and raise to power of 365: (1.0003287)^365 = 1.12747. 3. Subtract 1 and convert: 0.12747 * 100 = 12.75%. Result: The effective yield is 12.75% APY.

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Detailed Insights & Expert Guide

ℹ️ About this Calculation

This cryptocurrency investment and blockchain calculator evaluates Bitcoin trade profits, Proof-of-Stake (PoS) yield rewards, ASIC/GPU mining hash rate profitability, DeFi liquidity pool APY, and capital gains tax liabilities.

Variable Glossary

Input

Blockchain Parameters

Buy/Sell coin price, token quantity, mining hash rate (TH/s), power consumption (Watts), electricity cost ($/kWh), or staking yield %.

Parameter

Crypto Yield Output

Net profit ($), ROI %, daily mining net revenue ($), effective APY %, and short/long-term capital gains tax estimates.

How to Calculate Step-by-Step

1

Step 1

Select your cryptocurrency asset (BTC, ETH, SOL, Altcoins) and trading/staking operation type.

2

Step 2

Input execution price, exchange fees (taker/maker %), hardware power consumption, or DCA purchase schedule interval.

3

Step 3

Review net realized gains, projected annual staking rewards, mining break-even electricity price, or portfolio cost basis.

FAQ

How are cryptocurrency capital gains taxed?
In most jurisdictions (e.g. IRS in the US), crypto is classified as property. Selling, trading, or spending crypto triggers capital gains (short-term if held < 1 year, long-term if held > 1 year). Staking and mining rewards are taxed as ordinary income upon receipt.
What is Impermanent Loss in DeFi liquidity pools?
Impermanent loss occurs when the price ratio of pooled tokens changes compared to when you deposited them. The greater the price divergence, the more value you lose relative to simply holding the tokens outside the pool.
Are cryptocurrency returns guaranteed?
No. Crypto assets experience high price volatility, smart contract risk, and regulatory changes. Mining difficulty adjusts dynamically, impacting future block reward yields.