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Yield Farming
Yield Farms allow users to earn PPI while supporting Swappi by staking LP Tokens.
Yield Farm APR calculations include both:
- LP rewards APR earned through providing liquidity
- Farm base rewards APR earned staking LP Tokens in the Farm.
Why? Because when you stake your LP tokens in a farm to earn PPI, you're still providing liquidity to the liquidity pool, so you earn LP rewards as well!
The Farm Base APY is calculated according to the farm multiplier and the total amount of liquidity in the farm -- this is the amount of PPI distributed to the farm.
A quick example of calculating LP rewards:
If in the CFX/USDT pair, we see these values:
Liquidity: $100M
Volume 24H: $10M
Volume 7D: 200M
- Calculate yearly fees
- Use the 24H volume to calculate the fee share of liquidity providers in the pool (based on the 0.17% trading fee structure): $10,000,000*0.17/100 = $17,000
- Next, use that fee share to estimate the projected yearly fees earned by the pool (based on the current 24h volume): $17,000*365 = $6,205,000
- We can now use the yearly fees to calculate the LP rewards APR: That's yearly fees divided by liquidity: ($6,205,000/$100,000,000)*100 = 6.205% LP reward APR
Last modified 1yr ago