LP Restaking Farms
Last updated
Last updated
LP Restaking Farms allow users to earn PURSE by staking LP Token. Currently, a total of 2 Billion PURSE token was burnt from the liquidity reserve to support this PURSE Liquidity Mining Program.
Check out on How to Use Farms to get started with farming.
Yield farming comes with a risk of Impermanent Loss. It’s not as scary as it sounds and it is worth learning about the concept before you get started.
Check out this great article about Impermanent Loss from Binance Academy to learn more.
All the PURSE reward token minted by this Restaking Farm will be pre-burn first to ensure the total supply of PURSE remains stable.
There will be cap reward token (Farm's Cap Reward Token) for Restaking Farm and once the minted reward token amount (Farm's Minted Reward Token) reaches the cap, the contract will stop minting any new PURSE reward token. However, we will extend the PURSE Liquidity Mining Program, depending on the response from the community, such that new PURSE reward token can continuously be minted.
Yield Farming APR calculations include both:
LP Reward APR - Earned through providing liquidity on Dexes (E.g. PURSE and BUSD on PancakeSwap).
Farm Reward APR - Earned through staking LP Token in the Farm.
Total APR = Farm Reward APR + LP Reward APR
The Farm Reward APR is calculated based on the formula below:
Farm Reward APR = 28000 x 365 x PURSE Per Block x Bonus Multiplier x PURSE Token Price x 100% / TVL of Farm
For example:
Alice deposit 20 LP token into farmA.
Total LP token deposited to farmA is 100.
Given that PURSE Per Block of farmA is 200 and Bonus Multiplier of farmA is 10.
For each block, Alice receives 200 * 10 * (20/100) = 400 PURSE
APR = 28000 * 365 * 200 * 10 * PURSE Token Price * 100% / TVL of Farm
On top of farm reward, farmers receive LP Reward for providing liquidity to PancakeSwap liquidity pool. Here is an example of calculating LP Reward APR:
As shown in the BTCB/BUSD pair above:
Volume 24H: $9.68M Volume 7D: $13.88M LP Reward Fees 24H: $16.46K LP Reward APR: 2.90% Liquidity: $42.47M
LP Reward Fees 24H can be calculated using the 0.17% trading fee structure:
LP Reward Fees 24H = Volume 24H * 0.17% = 9.68M * 0.17 / 100 = $16.26K
Details on PancakeSwap Liquidity Pool
Calculate the yearly LP Reward fees
Using the LP Reward Fees 24H to estimate the projected yearly LP Reward fees: $16.46K * 365 = $6,007,900
Calculate the LP Reward APR using yearly LP Reward fees
Yearly LP Reward Fees / Liquidity = $6,007,900 / 42,470,000 x 100% = 14.15%
