diff --git a/docs/assets/apr-cl.png b/docs/assets/apr-cl.png new file mode 100644 index 000000000..a077ae3ff Binary files /dev/null and b/docs/assets/apr-cl.png differ diff --git a/docs/assets/apr-normal.png b/docs/assets/apr-normal.png new file mode 100644 index 000000000..9e1f45bb0 Binary files /dev/null and b/docs/assets/apr-normal.png differ diff --git a/docs/assets/apr-superfluid.png b/docs/assets/apr-superfluid.png new file mode 100644 index 000000000..f7662fb05 Binary files /dev/null and b/docs/assets/apr-superfluid.png differ diff --git a/docs/overview/integrate/apr.md b/docs/overview/integrate/apr.md new file mode 100644 index 000000000..1045adc41 --- /dev/null +++ b/docs/overview/integrate/apr.md @@ -0,0 +1,41 @@ +--- +sidebar_position: 11 +--- + +# APR Calculation + +## Introduction +APR for each pools is a metric that indicates the expected annualized return on investment for liquidity providers. APRs are calculated differently for CL pools and normal pools due to their distinct operational mechanisms. + +## Concentrated Liquidity Pools + +### Calculation: +- **APR for CL Pools**: +![](../../assets/apr-cl.png) +Where: +- **Spread Reward per Unit Liquidity**: This is the reward earned from the spread for providing liquidity, expressed per unit. +- **Incentive Reward per Unit Liquidity**: This is any additional incentive reward for providing liquidity, also expressed per unit. +- **Base Price**: The standardized value of one unit of liquidity in the pool, used to convert the reward values into a comparable base. +- **Seconds in a Year**: Represents the total number of seconds in a year, used for annualizing the return. It's calculated as \( 365.25 \times 24 \times 60 \times 60 \) to account for leap years. +- **Calculation Time Duration**: The duration in seconds over which the rewards were calculated + +## CFMM Liquidity Pools(Balancer pools, Stableswap Pools) + +1. **Standard APR Calculation** (for 1 day, 7 days, and 14 days): + - The APR is calculated for each time frame using the formula: + ![](../../assets/apr-normal.png) + - Where: + - `Distribured Amount_timeframe` is the sum of distributed rewards for the time frame (1 day, 7 days, or 14 days). + - `Exponent` is a factor related to the coin denomination. + - `Liquidity` is the total liquidity in USD for the pool, adjusted by the percentage bonded (if applicable). + - `Coin Price` is the current price of the coin. + - The multiplier \(36500\) annualizes the rate. + +2. **Superfluid APR Calculation** (if applicable): + - The Superfluid APR is calculated additionally for pools where it's relevant, using the formula: + ![](../../assets/apr-superfluid.png) + - Where: + - \(\text{Staking APR}\) is the APR from staking. + - `Superfluid Percentage` is the percentage of the pool that is superfluid. + - `Superfluid Risk Factor` is a risk adjustment factor. + - `APR_14d` is the 14-day APR calculated as above.