Fees vs yield: gas, bridges, swaps and compounding
Try a scenario:
The position
Simple annual rate before compounding. If you were quoted an APY, convert it with the APR to APY tool.
Getting in and out
Approvals plus the deposit itself, in CAD.
Pool fee plus price impact to get the token you need.
Compounding
$2,000 at 8.0% APR for 180 days
You keep $58.30: an effective 5.91% a year
The advertised rate would pay about $78.51 over this period; getting in, compounding and getting out cost $20.21. You are ahead after 46 days.
Costs to get in
$10.00
Costs to get out
$10.21
Compounding (best: never)
$0.00 over 0 claims
Break-even holding period
46 days
Smallest position that pays
$245
Costs as a share of the yield
26%
What is driving this result
- Fixed costs (gas, flat bridge fees) hurt small positions most: $8.00 is 0.40% of $2,000.
- Percentage costs (spread, bridge %) scale with size, so they cost the same share whatever you deposit: 0.60% here.
- Compounding only pays when a claim's gas is small next to the interest it unlocks. With $2.00 per claim the best frequency is never.
- Gas prices change minute to minute; enter what your wallet quoted. Rates are what the protocol shows, not a promise.
What would make this break even?
Each line changes one assumption and holds the others fixed.
- Holding period
- 46 days. You entered 180.
- Position size
- $245. You entered $2,000.
- APR
- 2.04%. You entered 8.00%.
| Position ↓ / Days held → | 30 | 90 | 180 | 365 | 730 |
|---|---|---|---|---|---|
| $250 | −38.3% | −7.6% | 0.1% | 4.0% | 5.9% |
| $500 | −18.8% | −1.0% | 3.4% | 5.7% | 6.8% |
| $1,000 | −9.1% | 2.3% | 5.1% | 6.5% | 7.3% |
| $2,500 | −3.2% | 4.2% | 6.1% | 7.0% | 7.8% |
| $5,000 | −1.3% | 4.9% | 6.4% | 7.3% | 8.0% |
| $10,000 | −0.3% | 5.2% | 6.6% | 7.4% | 8.1% |
| $25,000 | 0.3% | 5.4% | 6.7% | 7.5% | 8.2% |
Estimates from your inputs, calculated in your browser. Education, not financial or tax advice, and not advice from the site showing this calculator.
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