Question 1

What is the difference between APY and APR in crypto?

Accepted Answer

APR (Annual Percentage Rate) is the simple interest rate with no compounding. APY (Annual Percentage Yield) accounts for how often interest compounds — daily compounding always produces a higher effective yield than annual. For DeFi yield farming, most protocols advertise APY. Use the APY tab to convert instantly and see exactly how compounding frequency changes your returns.

Question 2

How do I calculate DeFi yield farming returns with compounding?

Accepted Answer

DeFi yield farming returns depend on four variables: the base APY of the pool, how often you claim and reinvest rewards, your time horizon, and protocol or performance fees. Enter your principal, APY, compounding frequency, and duration and the result updates in real time.

Question 3

What is impermanent loss and how do I calculate it for Uniswap LP positions?

Accepted Answer

Impermanent loss (IL) occurs when you provide liquidity to an AMM such as Uniswap or Curve and the price ratio of the two tokens changes after you deposit. The greater the divergence, the more IL you suffer versus simply holding. The IL calculator shows the exact USD loss at any price point, plus the number of days of trading fees needed to break even on your LP position.

Question 4

How is a crypto liquidation price calculated for leveraged trading?

Accepted Answer

For a long position: Liquidation Price = Entry Price x (1 - 1/Leverage + Maintenance Margin Rate + Fee Rate). Higher leverage means your liquidation threshold is closer to your entry. The liquidation calculator shows both long and short liquidation levels, a visual price gauge, and a leverage comparison grid at 2x, 5x, 10x, 20x, and 50x.

Question 5

Does dollar-cost averaging (DCA) work for Bitcoin and Ethereum?

Accepted Answer

Yes — research consistently shows that DCA outperforms lump-sum investing in high-volatility assets like Bitcoin and Ethereum over multi-year horizons because it lowers average cost basis during dips. The DCA calculator projects your final portfolio value, average cost basis, and total tokens accumulated based on your chosen frequency, duration, and expected price growth.

Question 6

How is crypto taxed? What is the short-term vs long-term capital gains rate?

Accepted Answer

In most jurisdictions, crypto profits are taxed as capital gains. In the US: assets held for less than 12 months are taxed at your ordinary income rate (10%-37%), while assets held for 12 months or more qualify for the lower long-term rate (0%, 15%, or 20%). The tax calculator estimates your full liability for both scenarios and shows exactly how much you save by holding longer.

Question 7

What are ERC-4626 vaults and how do I calculate net vault yield?

Accepted Answer

ERC-4626 is the tokenised vault standard on Ethereum. Protocols like Yearn, Beefy, and Aave use it to auto-compound yield strategies. Your net APY after fees is: Gross APY minus Annual Management Fee (charged on AUM) minus Performance Fee (charged on profits). The vault calculator lets you input custom fees so you see real take-home returns rather than the headline number advertised.

Question 8

What is an R-multiple and why does it matter for crypto trading?

Accepted Answer

An R-multiple measures how many times your initial risk you made or lost on a trade. R = Net P&L divided by Amount Risked. A 3R trade means you made three times what you risked. Professional traders track R-multiples to evaluate strategy quality independently of position size. The P&L calculator computes this automatically alongside ROI and net profit after fees.

Question 9

How do I calculate my Uniswap v3 LP range for maximum fee income?

Accepted Answer

In Uniswap v3 concentrated liquidity, you choose a price range for your position. Narrower ranges earn more fees per dollar of capital when the price stays in range, but you suffer more impermanent loss if the price moves out. The LP Range calculator shows the optimal tick range, capital efficiency multiplier versus v2, and projected fee APY at different volatility assumptions.

Question 10

What is a funding rate in crypto perpetuals trading?

Accepted Answer

Funding rate is a periodic payment between long and short holders in perpetual futures markets. When funding is positive, longs pay shorts; when negative, shorts pay longs. Rates are typically charged every 8 hours. High positive funding means the market is overleveraged long, which can signal a correction. The funding rate calculator shows your annualised cost or income from holding a perp position.