DeFi Yield Calculator
Calculate your net DeFi yield after protocol fees and gas costs.
Results
Visualization
How It Works
The DeFi Yield Calculator shows you what you'll actually earn from a decentralized finance protocol after subtracting the real costs that eat into returns: protocol fees and gas expenses. This matters because advertised APY figures often don't reflect these hidden costs, which can dramatically reduce your net profits, especially on smaller deposits. This tool is designed for both quick estimates and detailed planning scenarios. Results update instantly as you adjust inputs, making it easy to compare different approaches and understand how each variable affects the outcome. For best accuracy, use precise measurements rather than rough estimates, and consider running multiple scenarios to establish a realistic range of expected results.
The Formula
Variables
- Deposit Amount — Your initial investment in the DeFi protocol, measured in US dollars. This is the principal that will generate yield.
- Advertised APY — The annual percentage yield percentage displayed by the protocol before any fees or costs are deducted. This is the gross return, not your actual earnings.
- Protocol Fee — The percentage fee charged by the DeFi protocol itself, typically taken from your earned yield. Common ranges are 0.5% to 5% depending on the platform.
- Gas Cost per Harvest — The blockchain transaction fee required each time you claim or compound your rewards, measured in dollars. This varies based on network congestion and blockchain (Ethereum, Polygon, Arbitrum, etc.).
- Harvest Frequency — How often you plan to claim or compound your rewards, measured in days. Daily compounding costs more in gas but may generate more returns through compounding.
- Investment Period — The total number of days you plan to keep your deposit in the protocol, which determines how many harvest cycles you'll execute.
Worked Example
Let's say you deposit $10,000 into a liquidity pool offering 25% advertised APY. The protocol charges a 1% fee on earnings, and each time you harvest and compound your rewards, it costs $15 in gas fees. You plan to harvest every 7 days for a 365-day year. First, calculate gross yield: $10,000 × 25% × (365/365) = $2,500. Next, calculate total gas costs: (365 days ÷ 7 days per harvest) × $15 = approximately $780 in gas fees. Then calculate protocol fees on the $2,500 gross yield: $2,500 × 1% = $25. Your net yield is $2,500 - $780 - $25 = $1,695. Your net APY is ($1,695 ÷ $10,000) × 100 = 16.95%, substantially lower than the advertised 25%.
Practical Tips
- Compare net APY figures across protocols rather than advertised APY—a 30% APY protocol with high fees might net less than a 20% APY protocol with lower costs, especially on deposits under $50,000.
- Harvest less frequently if gas fees are high (like on Ethereum mainnet during congestion) by using weekly or monthly compounding instead of daily, even though you'll earn slightly less through reduced compounding effects.
- Use L2 blockchains like Polygon, Arbitrum, or Optimism where gas fees are 50-100x cheaper than Ethereum mainnet, which can make harvesting daily economical even on $5,000-$10,000 deposits.
- Calculate your break-even deposit amount: if gas costs are $20 per harvest and you harvest weekly, you need enough yield to justify that $1,040 annual gas cost, which typically requires at least $8,000-$15,000 deposits depending on APY.
- Monitor actual protocol fees by checking your transaction history on block explorers—some protocols advertise lower APY but charge hidden fees, while others are transparent, making the true net yield clearer over time.
Frequently Asked Questions
Why is my actual DeFi yield so much lower than the advertised APY?
Advertised APY is the gross return before any costs. Every time you harvest rewards, you pay blockchain gas fees (typically $5-$100+ per transaction depending on the network). Additionally, most protocols charge a percentage fee (1-5%) on your earned yield. Over a year with weekly harvesting, these costs can reduce your net APY by 5-15% or more. For example, a 50% APY might become 35-40% after fees and gas costs.
How often should I harvest and compound my rewards?
This depends on the relationship between your gas costs and your yield. If gas costs $50 per harvest but you only earn $40 per week, daily harvesting loses money. A good rule: harvest when your accumulated rewards exceed 2-3x the gas fee. On expensive networks like Ethereum, this might mean weekly or monthly harvesting. On cheap networks like Polygon, daily harvesting is usually profitable even on modest deposits.
Do protocol fees apply only to my earnings or to my entire deposit?
Protocol fees almost always apply only to your earned yield, not your principal deposit. If you earn $500 in yield and the protocol charges 2%, you lose $10 in fees while your $10,000 principal remains untouched. However, always verify the protocol's documentation because a few platforms charge performance fees differently. Check the smart contract or whitepaper if unsure.
Can I reduce gas costs by using different blockchain networks?
Yes, significantly. Ethereum mainnet gas fees can be $20-$200+ per transaction during normal-to-heavy congestion, while Polygon costs $0.10-$2, Arbitrum costs $0.50-$5, and Optimism costs $1-$10. However, the DeFi protocols available vary by network—not every protocol exists on every blockchain. Check where your target protocol operates and calculate the gas savings against any difference in APY offered on different networks.
Should I use auto-compounding vaults instead of manual harvesting?
Auto-compounding vaults (like Yearn Finance) can be cost-effective because they consolidate gas costs across many users, lowering the per-person expense. However, they charge their own fees (typically 2-20% of profits). Compare the net yield from a vault against manual harvesting: calculate how much you'd lose to gas costs yourself, then see if the vault's fee is lower. For deposits over $50,000, manual harvesting often wins; for smaller amounts, vaults usually make sense.
Sources
- Ethereum Gas Tracker and Fee Documentation
- DeFi Protocol Fee Structure Guides (Aave, Compound, Curve documentation)
- Investopedia: How DeFi Yields Work
- Layer 2 Blockchain Cost Comparison (Polygon, Arbitrum, Optimism)
- CoinMarketCap: DeFi Yield Farming Explainer