> For the complete documentation index, see [llms.txt](https://squiddex-official.gitbook.io/squiddex/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://squiddex-official.gitbook.io/squiddex/faq/how-does-it-work-on-squiddex.md).

# How does it work on SquidDex?

Let’s take as an example investing in SquidDex Farms:

*In case you do Manual Compound, that will make your profit higher since the rewards earned are added to the initial deposit and start generating income as well.*<br>

{% hint style="info" %}
*APR on SquidDex represents the annual percentage income for staking tokens*
{% endhint %}

**FOR EXAMPLE :** \
\
You approved 1 000 SQD Token on a farm under 40% APR. That means that at the time of calculation, your income for 1 year can be calculated as follows:

1 000 SQD Token (the invested sum) x 40 % (APR) / 100 = 400 SQD Token — your 1-year income.

To calculate the daily income, you need:

1. 40% (APR) / 365 (days of the year) \~ 0.001% (your daily income in percentage)
2. 1 000 SQD (the invested sum) x 0.001% of your daily income in percentage) / 100 (also can be counted as 1 000 x 0.001 %) \~ 1 SQD Token  — your daily income in SQD Token

That means that your 1-year total sum potentially can be:

1 000 SQD Token (if you unstake your deposit sum) + 400 SQD Token (your income  —  the sum of APR) \~ 1 400 SQD Token

{% hint style="info" %}
APR is calculated by summing up the rewards of the liquidity providers and the rewards in SQD Token
{% endhint %}

**APY** (Annual Percentage Yield) on SQUIDDEX   is the annual percentage of return earned from staking, taking into account the automatic increase of the invested sum.

{% hint style="info" %}
*Keep in mind that the rates are approximate, provided for your convenience only, and in no way represent a guaranteed return. All the mathematical calculations aren’t financial advice.*
{% endhint %}

**For Example** You approved 1 000 SQD in SQD farms for Auto-compounding under 60% APY.

That means that at the time of calculation, your income for the 1 year can be calculated:

1 000 (the invested sum) x 60% (APY in percentage) / 100 (also can be counted as 1 000 x 60% )= 600 SQD  — your 1- year income if you won’t click harvest during this year.

Pay attention that you cannot accurately calculate your daily income because of permanent automatic change and an increase in your investment sum.

That means that your 1-year total sum potentially can be:

1 000 SQD (if you harvest your deposit sum) + 6 00 SQD (your income — the sum of APY) = 1 600 SQD

{% hint style="info" %}
*APY is based on your one-year income if Harvest and Compound are made once a day. Provided APY calculations depend on current APR rates.*
{% endhint %}

{% hint style="info" %}
*Keep in mind that the rates are approximate, provided for your convenience only, and in no way represent a guaranteed return. All the mathematical calculations aren’t financial advice.*
{% endhint %}

### Why **do the APY & APR percentages change?**

The APR & APY percentages change dynamic depending on the number of funds locked in the certain SQD Staking Pool or Farm.

**There is a principle of its changes:**

The more users stake their tokens in Launchpools or Farms, the lower APR & APY percentages will be.

It means that APR & APY percentages will change in case of the high demand on a certain Launchpool or Farm.