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# Yield Farming

Yield Farms allow users to earn XTT while supporting XSwap DEX by staking LP Tokens, XSP2.

**NOTE:**

Yield farming can give better rewards than Staking, 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.

Why? Because when you stake your LP Tokens, XSP2 in a farm to earn XTT, you're still providing liquidity to the liquidity pool, so you earn LP rewards as well!

So how do we calculate those figures?

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 XTT distributed to the farm.Farm Base APR

On top of that, farmers receive

**LP rewards**for providing liquidity. Here's an example of calculating**LP rewards**:In the XTT-WXDC pair, we see these values:

In the XTT-WXDC pair above, we see these values:

**Liquidity:**$364,510

**Volume 24H:**$4,785

**Volume 7D:**40,491

- Calculate yearly fees
- Use the 24H volume to calculate the
**fee share**of liquidity providers in the pool (based on the 0.214% trading fee structure): $4,785*0.214/100 =**$10.234** - Next, use that
**fee share**to estimate the projected**yearly fees**earned by the pool (based on the current 24h volume): $10.234*365 =**$3,737.56**

- We can now use the yearly fees to calculate the
**LP rewards APR:**That's**yearly fees**divided by**liquidity:**($3,737.56/$364,510)*100 =**1.025% LP reward APR**

Last modified 7mo ago