How to calculate estimated APR, Debt ratio, and Liquidation price
This calculation logic ignores price impact, slippage and swap fee. Only consider APR from trading fee.
Description | Variable | Example |
|---|---|---|
Token A name | tokenA | ETH |
Token B name | tokenB | USDC |
Token A supply amount | supplyA | 10 |
Token B supply amount | supplyB | 10000 |
Leverage | leverage | 3 |
Borrow ratio tokenA : tokenB (0-1) | borrowRatio | 0.5 |
Farming duration (days) | duration | 60 |
Expected token A price | newPriceA | 1500 |
Expected token B price | newPriceB | 1 |
No calculation needed
Description | Variable | Example |
|---|---|---|
Token A price | priceA | 1000 |
Token B price | priceB | 1 |
Farming APR (7 days avg., 1x) | farmAPR | 40% |
Token A borrow interest | borrowAPRA | 20% |
Token B borrow interest | borrowAPRB | 10% |
Token A collateral factor | collA | 8360 |
Token B collateral factor | collB | 9598 |
LP collateral factor | collLP = min(collA, collB) | 8360 |
Token A borrow factor | borrA | 11961 |
Token B borrow factor | borrB | 10419 |
Calculation needed -- at day =
0Description | Variable | Logic | Example |
|---|---|---|---|
priceA : priceB | priceAtoB | priceA / priceB | 1000 |
Position Value (in tokenB) | posValue | leverage * (supplyA * priceAtoB + supplyB) | 60000 |
liquidity | liquidity | posValue / (2 * sqrt(priceAtoB)) | 948.68 |
Total debt (in tokenB) | debtAmt | (leverage-1) * (supplyA * priceAtoB + supplyB) | 40000 |
Token A debt amt | debtA | debtAmt * borrowRatio / priceAtoB | 20 |
Token B debt amt | debtB | debtAmt * (1-borrowRatio) | 20000 |
Calculation needed (at day =
duration)PnL
Description | Variable | Logic | Example |
|---|---|---|---|
newPriceA : newPriceB | newPriceAtoB | newPriceA / newPriceB | 1500 |
Position token A amt | newPosA | (1 + duration * farmAPR / 365) * liquidity / sqrt(newPriceAtoB) | 26.11 |
Position token B amt | newPosB | (1 + duration * farmAPR / 365) * liquidity * sqrt(newPriceAtoB) | 39158.28 |
Position token A amt | newDebtA | (1 + duration * borrowAPRA / 365) * debtA | 20.66 |
Position token B amt | newDebtB | (1 + duration * borrowAPRB / 365) * debtB | 20328.77 |
Net token A amt | netA | newPosA - newDebtA | 5.45 |
Net token B amt | netB | newPosB - newDebtB | 18829.38 |
Net value (in tokenB) | netValue | netA * newPriceAtoB + netB | 27004.51 |
Hold value (in tokenB) | holdValue | supplyA * newPriceAtoB + supplyB | 25000 |
PnL(%) vs Hold | pnl | (netValue / holdValue - 1) * 100% | 8.02% |
Debt Ratio
Description | Variable | Logic | Example |
|---|---|---|---|
Position collateral credit | posCollCredit | (newPosA * newPriceAtoB + newPosB) * collLP | 654748382.5 |
Position borrow credit | posBorrCredit | newDebtA * newPriceAtoB * borrA + newDebtB * borrB | 582433933.3 |
debt ratio (%) | debtRatio | posBorrCredit / posCollCredit * 100% | 88.96% |
Liquidable Price :
newPriceAtoB > 2694 or newPriceAtoB < 272.73Calculation:
posCollCredit < posBorrCredit(newPosA * newPriceAtoB + newPosB) * collLP < newDebtA * newPriceAtoB * borrA + newDebtB * borrB(1 + duration * farmAPR / 365) * 2 * liquidity * sqrt(newPriceAtoB) * collLP < newPriceAtoB * newDebtA * borrA + newDebtB * borrBSolving
B * sqrt(newPriceAtoB) < A * newPriceAtoB + C, where- 1.
newDebtA * borrA = A - 2.
(1 + duration * farmAPR / 365) * 2 * liquidity * collLP = B - 3.
newDebtB * borrB = C
or