# Yield Farming

Yield Farms allow users to earn LIL while supporting Lillion by staking LP Tokens.

Yield farming can give better rewards than Pools, 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 startedYield 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 in a farm to earn LIL, 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 LIL distributed to the farm.On top of that, farmers receive

**LP rewards**for providing liquidity. Here's an example of calculating**LP rewards**:In the WBNB/BUSD pair above, we see these values:

**Liquidity:**$387.42M

**Volume 24H:**$96.97M

**Volume 7D:**709.73M

- Calculate yearly fees
- 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 APR**

Last modified 6mo ago