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Types of pool & How APY comes from
There are two main types of liquidity pools on Homora V2; liquidity providing pool and yield farming pool, each earn yield from different sources.

Liquidity providing pool

Example of Liquidity Providing Pool on Uniswap V2 (Ethereum)
  • Users who open liquidity providing positions (1x) on selected liquidity providing pools will earn only normal trading fee APY from corresponding DEXes.
  • Users who open leveraged liquidity providing positions (>1x) on selected liquidity providing pools will earn normal trading fee APY from corresponding DEXes and additional trading fee APY from their leveraged position. However, the final leveraged APY must take into account the borrowing APY as users borrow additional fund to provide liquidity.

Yield farming pool

Example of Yield Farming Pool on Sushiswap (Ethereum)
  • Users who open yield farming positions (1x) on selected yield farming pools will earn both normal trading fee APY and yield farming APR from corresponding DEXes.
  • Users who open leveraged yield farming positions (>1x) on selected yield farming pools will earn both normal trading fee APY and yield farming APR from corresponding DEXes and additional trading fee APY and yield farming APR from their leveraged position. However, the final leveraged APY must take into account the borrowing APY as users borrow additional fund to yield farm.
Comparing APY between DeFi protocols
Note that each leveraged yield farming protocol uses different APY calculation approaches which may result in different APY being displayed on the UI. Homora v2 uses 7d trading fees when calculating for each pool's APY.
Note that the final leveraged APY shown on Homora V2 UI before users confirm their selected strategy is positive only if the yield APY > borrowing APY.
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Liquidity providing pool
Yield farming pool