How MoonMath calculates defi yield

The formula

The observed total rate is compounded over the period, split into base and reward legs by their share of the rate, with only the reward leg revalued by its price change. Performance fees and transaction costs are then subtracted.

What it reads

• The principal and the period in days
• The base and reward annual rates as observed
• Scenario price changes for the principal and for the reward token
• The performance fee percentage and any transaction costs

What it assumes

• The observed rate is held constant for the period as a scenario, not a forecast
• Only the reward leg is revalued: the base yield is never touched by a price-change input
• The performance fee applies to the valued yield only, not to principal appreciation
• Yield accrues on the starting principal with no deposit or withdrawal during the period

Run it

Stress-test an observed DeFi pool APY after reward-token price changes, principal movement, performance fees and transaction costs. Results keep provider observations separate from user-controlled scenarios.

How the market itself works

This page describes MoonMath's arithmetic. The mechanics section describes the market: how an order book forms a price, why order-book depth is not the same thing as pool liquidity, and what a public book does and does not let you observe.