Annual Percentage Rate (APR) calculation on Collection.xyz

  1. Determine the number of periods per year based on the given duration We are using 1d duration, so there will be 365 periods per year

  2. Calculate the total value locked (TVL) by multiplying the market cap of ETH by the percentage of the market cap that is actively providing liquidity: TVL = MarketCapEth* pctOfMarketCapThatlsActively ProvidingLiquidity *Assumption used: pctOfMarketCapThatlsActivelyProvidingLiquidity = 0.05

  3. Calculate the accrual per period by multiplying the volume in ETH by the collection XYZ share and the fee on trade volume: accrualPerPeriod = VolumeEth * collectionXYZShare * feeOnTradeVolume *Assumption used: collectionXYZShare = 0.2 feeOnTradeVolume = 0.05

  4. Calculate the accrual per year by multiplying the accrual per period by the number of periods per year accrualPerYear = accrualPerPeriod * amountOfPeriodsPerYear

  5. Finally, calculate the APR by dividing the accrual per year by the TVL APR = accrual PerYear / TVL

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