Exchange Rewards
Last updated
Last updated
When users use Classic Swaps to exchange tokens they make use of the individual liquidity pools that have been provided by investors. In return for this service the user will pay a 0.25% trading fee, which is distributed as follows:
0.17% - Returned to Liquidity Pools and distributed as rewards to LP providers.
0.08% - Used to fund the maintenance and ongoing development of the platform.
When a user performs an exchange, the 0.17% LP provider reward is automatically deposited back into the LP pool as one of the underlying tokens. This has the effect of increasing the value of the pool and therefore each LP token that each investor owns. When an investor withdraws from the pool they will then be able to exchange their LP tokens for their share of the larger pool.
Farming allows you to earn more CHARM tokens as a reward for staking your LP tokens and supporting the OmniDex platform. Rewards are calculated dynamically and so you will be able to see how much you have earned as it happens.
The Farm APR calculations include both:
LP rewards APR earned through providing liquidity and;
Farm base rewards APR earned staking LP Tokens in the Farm.
This is because, when you stake your LP tokens in a farm, you're still providing liquidity to the liquidity pool and so you earn LP rewards as well!
FarmTotalApr = FarmBaseApr + LPRewardsApr
The Farm Base APR is calculated according to the farm multiplier and the total amount of liquidity in the farm. The multiplier reflects how much of the total available CHARM is given to any particular pool and the value of this allocated CHARM is then compared to the total liquidity in that pool in order to establish the farm APR.
The LP reward APR is calculated by comparing the total liquidity in a pool with the transaction volume of that pool:
The example below shows how the LP reward APR is calculated:
Liquidity: $387.42M Volume 24H: $96.97M Volume 7D: 709.73M
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): $96,970,000*0.17/100 = $164,849
Next, use that fee share to estimate the projected yearly fees earned by the pool (based on the current 24h volume): $164,849*365 = $60,169,885
We can now use the yearly fees to calculate the LP rewards APR: That's yearly fees divided by liquidity: ($60,169,885/$387,420,000)*100 = 15.53% LP reward APR