APR
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