How APR is calculated

In Liquidity, with the non-fungible liquidity and customizable price range ability. Each LP position will have its own LP fee.

The total APR is combined by the LP fee APR.

LP fee

Theoretically speaking, given a price range and liquidity user about to add, we can estimate the expected future 7 days fee as following

$$fee_{next7d} = fee_{in} \frac{\Delta{L}}{L_{in} + \Delta{L}}$$

• $fee_{in}$ : Fee amount accrued in the user specified price range in last 7 days

• $L_{in}$: Current liquidity in the user specified price range

• $\Delta{L}$: Liquidity user want to add to the price range

Fee in range

For $fee_{in}$, we use the historical trading volume data, fee tier and historical price data to estimate the price in range

$fee_{in} = f_tV_{7d}\frac{T_{in}}{T_{7d}}$

• $f_t$: Fee tier

• $V_{7d}$: Total trading volume of last 7 days

• $T_{in}$: Duration, measured in seconds, of prices staying within the price range in the past 7 days

• $T_{7d}$: 7 days measured in seconds