# Farming

![](https://708384545-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F-Mdp4fjGfZFcARkxFmyK%2Fuploads%2FptoM0TjKEFcj1hECikmy%2Fwhatisfarming.png?alt=media\&token=db7f9607-f054-4174-a721-11e6e7c1d8a2)

Yield Farms allow users to earn POSI while supporting Position Exchange by staking LP Tokens.

Check out our [How to Use Farms guide](https://docs.position.exchange/products/farming/how-to-use-farms) to get started with farming.

{% hint style="warning" %}
Yield farming can give better rewards than the classic Pools, but it comes with a risk of **Impermanent Loss**. It’s not as scary as it sounds, but it is worth learning about the concept before you get started.

Check out this great [article about Impermanent Loss ](https://academy.binance.com/en/articles/impermanent-loss-explained)from Binance Academy to learn more.
{% endhint %}

## Reward calculations

Yield Farm APR calculation includes both the rewards earned through providing liquidity and rewards earned staking LP Tokens in the Farm.

Previously, rewards earned by LP Token-holders generated from trading fees were not included in Farm APR calculations. APR calculations now include these rewards, and better reflect the expected APR for Farm pairs.

Below is a basic explanation of how APR is calculated.

Let's take this as example. Imagine the POSI/BUSD stats are as follow:

**Liquidity:** $15M\
**Volume 24H:** $5M\
**Volume 7D:** 35M

To calculate the APR, first we take the 24hour volume, $5,000,000, and calculate the fee-share of LP-holders, 0.17% \[**$5,000,000\*0.17/100 = $8,500]**.

Next, we estimate the yearly fees based on the 24h volume \[**$8,500\*365 = $3,102,500**].

Now we can calculate the fee APR with yearly fees divided by liquidity \[(**$3,102,500/$15,000,00)\*100 = 20.68%**].

With the fee APR, we can add the fee APR (20.68%) and the Farm staking APR (20.08%) to get the new total APR \[**20.68%+20.08% = 40.76%**].