> For the complete documentation index, see [llms.txt](https://docs.grofidex.io/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.grofidex.io/features/yield-farming.md).

# Yield Farming

<figure><img src="/files/frywf28TX4lYasz1oKfi" alt=""><figcaption></figcaption></figure>

Yield Farming enables users to earn U2U tokens while supporting GroFi Dex by staking LP Tokens.

Explore our [How to Use Farms](/features/yield-farming/how-to-use-farms.md) guide to begin your journey into farming.

## Reward calculations <a href="#reward-calculations" id="reward-calculations"></a>

Yield Farm APR calculations include both:

* **LP rewards APR** is earned by providing liquidity.
* **Farm base rewards APR** is earned by staking LP Tokens in the Farm.

Farm total APR = Farm base APR + LP rewads APR

Why? Because when you stake your LP tokens in a farm to earn U2U, you're essentially providing liquidity to the liquidity pool, thus earning LP rewards alongside!

## Calculating Farm Base Reward APR <a href="#calculating-farm-base-reward-apr" id="calculating-farm-base-reward-apr"></a>

**The Farm Base APR** is determined by the farm multiplier and the total liquidity in the farm, which represents the amount of U2U distributed to the farm.

## Calculating LP Reward APR <a href="#calculating-lp-reward-apr" id="calculating-lp-reward-apr"></a>

In addition, farmers receive **LP rewards** for providing liquidity. Here's an example of how **LP rewards** are calculated:

<figure><img src="/files/LddoMuttrQUavvYoo6mb" alt=""><figcaption></figcaption></figure>

In WBTC/USDT pair above, we see these values:

**Liquidity:** $3.43M&#x20;

**Volume 24H:** $11.38K&#x20;

**Volume 7D:** $53.85K

* Calculate yearly fees
  * Use the 24-hour volume to calculate the **fee share** of liquidity providers in the pool, based on the 0.05% trading fee structure: $11,380 \* 0.05 / 100 = $5.69
  * Next, use that **fee share** to estimate the projected **yearly fees** earned by the pool based on the current 24-hour volume: $5.69 \* 365 = $2076.85
* We can now use the yearly fees to calculate the **LP rewards APR**: That's **yearly fees** divided by **liquidity,** multiplied by 100: ($2076.85 / $3,430,000) \* 100 = 0.06% LP reward APR.