# Yield Farming

Yield Farms allow users to earn DEXO Tokens by staking LP Tokens.

Yield farming can give better rewards, but it comes with a risk of

**Impermanent Loss**. It’s not as scary as it sounds, but it is worth learning about the concept before you get started.Yield Farm APR calculations include both:

**LP rewards APR**earned through providing liquidity and;**Farm base rewards APR**earned staking LP Tokens in the Farm.

While you stake your LP Tokens in a Farm to earn more DEXO Tokens, you're still providing liquidity to the respective pool, hence you earn LP rewards as well!

The

**Farm Base APR**is calculated according to the farm multiplier and the total amount of liquidity in the farm -- this is the amount of DEXO Tokens distributed to the farm.On top of that, farmers receive

**LP rewards**for providing liquidity. Here's an example of calculating**LP rewards**:Example:
Assume Total Liquidity: $387.42M
Volume 24H: $96.97M
Volume 7D: 709.73M

- Use the 24H volume to calculate the
**fee share**of liquidity providers in the pool (based on the 0.17% trading fee structure): $96,970,000*0.17/100 =**$164,849** - Next, use that
**fee share**to estimate the projected**yearly fees**earned by the pool (based on the current 24h volume): $164,849*365 =**$60,169,885** - We can now use the yearly fees to calculate the
**LP rewards APR:**That's**yearly fees**divided by**liquidity:**($60,169,885/$387,420,000)*100 =**15.53% LP reward AP**

Last modified 11mo ago