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Yield Farming
Yield Farming on GolSwap is easy!
Yield Farms allow users to earn GOL while supporting GolSwap by staking GLP Tokens.
Yield farming can give better rewards than Staking 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.
Reward calculations
Yield Farm APR calculation includes both the rewards earned through providing liquidity and rewards earned staking GLP Tokens in the Farm.
Previously, rewards earned by GLP 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.
(PIC)
In the image above of the GOL/USDT pair, we see these values:
Liquidity: $387.42M Volume 24H: $96.97M Volume 7D: 709.73M
To calculate the APR, first we take the 24hour volume, $96,970,000, and calculate the fee-share of GLP-holders, 0.2% [$96,970,000*0.2/100 = $193,940].
Next, we estimate the yearly fees based on the 24h volume [$193,940*365 = $70.,788,100].
Now we can calculate the fee APR with yearly fees divided by liquidity [($70.,788,100/$387,420,000)*100 = 18.27%]
With the fee APR, we can add the fee APR (15.53%) and the Farm staking APR (20.08%) to get the new total APR [8.27%+20.08% = 35.61%].
Last modified 7mo ago
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Reward calculations