2.6 KiB
| description |
|---|
| From emissions, estimate APYs |
APYs
Multiply, and multiply again. And again.
This page is about APYs. There's also estimates of APY vs time and a guide to estimating APYs.
About APYs
Source of Rewards
Rewards are earned by users that participate in one or more Data Farming streams. Passive DF allows passive holding of veOCEAN; Active DF streams require more work from the user.
Historically, annual percentage yields (APYs) are 5-20%. See for yourself: in DF app and scroll down to "Data Farming History".
You can do your own APY estimations. In Passive DF, APY is highly dependent on the locked amount and duration of lock. In other DF streams, there are other factors.
Definition of Yield, WPY, APY
A yield is the relative gain in value compared to the amount you started with, minus costs. Specifically:
yield = (start amount + gained amount - costs) / (start amount) - 1.0
For example, if you start with 1000 OCEAN, have 6 OCEAN gross revenue, and 1 OCEAN costs (net 5 OCEAN):
yield = (1000 + 6 - 1) / (1000) - 1.0 = 0.005
We can express yield as a percentage simply by multiplying by 100 (%). For example, yield of 0.005 in percentage is 0.005 * 100% = 0.5%.
The yield for one week is Weekly Percentage Yield, or WPY. For example, if you started with 1000 OCEAN and netted 5 OCEAN from DF, in one week, then your WPY = 0.005 = 0.5%.
The yield for one year is Annual Percentage Yield, or APY. APY can be estimated from WPYs. Assuming no compounding, APY = WPY*52.
Costs
Costs should not be under-estimated. Eg if you're only doing Passive DF, and you lock a small amount of OCEAN for a short time, costs may exceed your gross income.
Costs include:
- Gas fees for transactions (txs) on the various chains. Eg veOCEAN, passive DF rewards, and Volume DF rewards are on Ethereum mainnet. Predictoor DF is on Sapphire mainnet.
- Txs include: locking OCEAN, claiming passive rewards, claiming active rewards, and withdrawing rewards.
- To compound returns, these txs need to be repeated. The ideal frequency to compound rate is whatever maximizes your yield - which depends on how much OCEAN you've locked, tx fees, etc.
- Cost of compute hardware to run Predictoors, e.g. on cloud services
The guide to estimate APYs drills deeper into estimating APYs.
Next: APYs Guide
Back: Reward Schedule