HODL vs. Staking/Yield Farming: Crypto Strategy Calculator

Is it better to just HODL your crypto, or could you earn more by staking it or providing liquidity in a yield farm? Simulate both scenarios side-by-side to explore potential outcomes.

Simulation Tool: Results depend heavily on your APY, price, and Impermanent Loss assumptions, which are speculative. This is for educational comparison, not financial advice.

Strategy Simulation Inputs

Common Investment Inputs

Staking / Yield Farming Specifics

How This Comparison Works

Our calculator helps you weigh the potential outcomes:

  1. Common Inputs: You set your initial investment, the crypto's starting price, how long you plan to invest, and your expected future price for the crypto.
  2. HODL Scenario: Calculates the simple outcome of buying the crypto and holding it until the end of the investment horizon.
  3. Staking/Yield Farming Scenario:
    • Calculates how your initial coins could grow based on the APY and compounding frequency you provide.
    • Optionally deducts staking/unstaking fees.
    • Optionally factors in an estimated Impermanent Loss (IL) if you're providing liquidity to a pair. You can estimate this using our Impermanent Loss Calculator or by inputting an expected relative price change for the paired asset.
  4. Side-by-Side Results: See the potential final values, net profit/loss, and ROI for both strategies.

Understanding the Strategies

HODLing (Hold On for Dear Life)

What it is: The simplest strategy – buying a cryptocurrency and holding it for the long term, regardless of price fluctuations, believing in its fundamental value.

Pros: Simple, low effort, avoids emotional trading mistakes, potentially lower tax implications (depending on jurisdiction and holding period).

Cons: Misses out on potential passive income from staking/lending. Capital is idle.

Staking & Yield Farming

What it is: Actively using your crypto to earn more crypto.Staking often involves locking up tokens to support network operations (e.g., Proof-of-Stake).Yield Farming typically means providing liquidity to DeFi protocols (AMMs) to earn trading fees and/or liquidity mining rewards.

Pros: Potential to earn passive income (APY), compounding returns can significantly boost holdings.

Cons: More complex, involves protocol risks (smart contracts, hacks), potential for Impermanent Loss in yield farming, staking lockup periods, gas fees.

Key Considerations When Comparing:

  • APY Sustainability: High APYs in DeFi can be temporary. Use a conservative or average APY for long-term projections. Our APY/APR calculator can help you understand true yields.
  • Impermanent Loss (IL): This is a real risk in yield farming with volatile pairs. If you provide liquidity for ETH/USDC and ETH price moons, IL can reduce your overall gains compared to just HODLing ETH. Use our IL Calculator to estimate.
  • Fees: Staking, unstaking, claiming rewards, and DeFi transactions can all incur fees (network gas fees, protocol fees). Factor these in.
  • Risk Tolerance: Staking and yield farming introduce additional risks beyond just holding an asset.

Simulation Disclaimer

This calculator is for illustrative and educational purposes only. APY, future prices, and Impermanent Loss are estimates you provide and are subject to significant uncertainty and market volatility. Staking and Yield Farming carry inherent risks including smart contract vulnerabilities and economic exploits. This is not financial advice. Always do your own thorough research (DYOR) and consult with a qualified financial advisor.