Liquidity pool roi calculator
Liquidity pool roi calculator. These tokens act as a receipt, allowing you to claim your original stake and interest earned. Hey everybody, I am kinda new to pancake swap. ROI = (1,000,000 – 500,000) / (500,000) = 1 or 100%. It allows users to trade assets without the need for a traditional buyer and seller match, by pooling their assets together and earning fees based on the trading activity in the pool. The hard part is choosing the most profitable liquidity pools. 01% interest, which makes it not worth the effort. Other token weights are possible, such May 18, 2024 · Liquidity describes the degree to which an asset or security can be quickly bought or sold in the market without affecting the asset's price. IMX/USDT APY Calculator on ReHold. 15 min. com To make liquidity provisioning smoother and less challenging, the new automatic APR displays with a brand new ROI calculator are available to use whenever you are providing liquidity or farming. Go. I just wanted to express how it's very difficult to tell what one's investment in a liquidity pool is actually doing. Jan 13, 2023 · A liquidity pool is a smart contract containing large portions of cryptocurrency, digital assets, tokens, or virtual coins locked up and ready to provide essential liquidity for networks that facilitate decentralized trading. I think it would be great if Tinyman had more statistics - an aggregated view of past performance of pools and impermanent losses, and a difference calculation in invested coins to current coins. Using the formula, you can calculate the impermanent loss and assess the impact on your liquidity provision. Liquidity providers are rewarded. Launch App. Liquidity Pool & Impermanent Loss Calculator - Basic. 2 To keep things simple, let’s imagine our liquidity provider supplies 1 ETH and 100 DAI to the Uniswap DAI exchange, giving them 1% of a liquidity pool which contains 100 ETH and 10,000 DAI. there are a couple of tools out there that can do this that have already been mentioned, so I'm going to mention another one that hasn't been mentioned APY. Track your liquidity pool gains and impermanent loss and get the data you need to know when to enter and exit liquidity pools or yield farms to maximize your returns. Total Value Locked. 3% trading fee, while PancakeSwap has a 0. Liquidity pool simulator for Uniswap and Kyberswap. Mar 23, 2021 · The Returns of Adding Liquidity To Uniswap Pools. Providing liquidity on Uniswap V3 can be challenging due to the many different parameters and I saw something interesting when reviewing my Uniswap liquidity pool on intotheblock's defi dashboard. High. ROI calculations are simple and help an investor decide whether to take or skip an investment opportunity. Data platform for. This smart contract provides users of decentralized exchanges (DEXs) with access to liquidity for their trades. Still neglecting fees, let’s imagine that after some trading, the price has changed; 1 ETH is now worth 120 DAI. May 23, 2022 · The liquidity pool uses an algorithm. Calculate your SushiSwap v3 positions fee returns, APY, APR, ROI, yields, and impermanent loss based on how much pool liquidity you provide. This calculator uses Uniswap's constant product formula to determine impermanent loss. Volume (24h) $0. When a new pool is created, the first liquidity provider is the one that sets the initial price of the assets in the pool. An individual farm will receive CAKE emissions based on: Technically, setting a price for your token when creating a liquidity pool is incredibly simple. Apr 22, 2024 · A liquidity pool is a crowdsourced pool of a set of cryptocurrencies that are locked in a smart contract and are used to facilitate trades between the assets on decentralized exchanges. That’s 30% less budget you have to hire. Magazine . Pretend that is your CAKE balance. Learn more. They enable decentralized trading, lending, yield generation, and much more. In the fee calculation for v2, we subtract the implied capital returns derived from the pool’s price changes from the total returns to obtain the fee returns. Calculate APY based on market volatility for any token. As a consequence, v1 liquidity pools pay no transaction fees to liquidity providers; however, the liquidity pool tokens (PLP), which are given for providing liquidity, can be staked in the PulseX farms to provide owners with free INC and other tokens. Free online business and financial ratio calculators. It offers fast and inexpensive transactions, the ability to farm liquidity, provides tokens, and incorporates other specific features. LP Token Value Often times LP tokens can be staked in contracts and it becomes difficult to find the value of your staked tokens. Sharing a simple ROI calculator for Uniswap. They correspond to the real assets in the positions via equations. The vision of PancakeSwap is to create a decentralized finance platform that is easy to use and accessible to everyone Nov 16, 2023 · Learn how crypto liquidity providers, pools, and tokens increase available liquidity in the DeFi ecosystem, and bring functionality to AMMs like Uniswap. Cost of Investment. The marginal liquidity assumes that the position added is small relative to the overall pool size, and there is no effect on the behavior of other participants in the pool. The calculator will automatically figure the percentage change Jun 7, 2022 · Liquidity pools are designed to incentivize users of different crypto platforms, called liquidity providers (LPs). Latest synced block: Eth Price:- First, when comparing APRs, you need to ensure the total staked liquidity between two farms is equal. This implies a price of 1 ETH = 100 DAI. Step 7: Monitor and Manage Your Investment PancakeSwap is a decentralized exchange built on Binance Smart Chain. In Uniswap, this is provided at the very bottom when looking at the analytics for a pair. The most popular decentralised exchange is Uniswap, with over $7 billion in total value locked in the protocol at the time of writing. As a result, you may lose your entire investment. 3% trading fee (more or less, depending on the pool) paid by traders is distributed proportionately to all the liquidity pool providers. org. CAKE. In this article, we describe common way of ROI calculation and analyze risks including inflation, price increasing, and pool strategies. Add the APR. It compares the market value with the value if you had held the same position and not provided liquidity to the pool and computes a figure labeled “ROI vs HODL” to show the relative increase or decrease in performance. The liquidity outside the typical price range of a stablecoin pair is rarely touched. So in order to calculate how much I should be earning per day, wouldn't it be: Calculate my pool share: 1000/10,000,000 = 0. vision It might be your best bet if you want a real deep dive into loss / gains for the lp, it also calculates farming rewards if the pool you're in allows it Jul 20, 2020 · In its basic form, a single liquidity pool holds 2 tokens and each pool creates a new market for that particular pair of tokens. Jun 23, 2022 · The final tab shows “return on investment” and gives several hypothetical situations to compare your performance with. Feb 27, 2020 · Supplying $100 of liquidity into an ETH/DAI pool requires a deposit of $100 worth of ETH and $100 DAI, so $200 in total. Pool ROI is constantly changing based on volume, liquidity, pool rewards, and asset price fluctuation, so staying informed about pool metrics is an important skill for LP's to have. When deposited 10 DAI and 0. May 25, 2023 · Neutralize the difference in pool structures by introducing the Liquidity Concentration Factor. Some exchanges also offer multiple crypto asset pools. These assets can then be traded against each other on a DEX. 00. ago. Mar 23, 2023 · PulseX has two different versions of liquidity pools. Osmosis allocates up to 20% of inflation to incentivize users to bond their liquidity on Osmosis. investors and protocols. Pool Information. Once you have entered the token amounts you would like to invest, Balancer will give you a summary of the swap fee charged in the pool and the amount of BPT you will receive. This Excel worksheet lifts the lid by modeling a Uniswap AMM liquidity pool, using the exact calculations from the original Uniswap Core smart contracts. 100 USDC to and 10 “MYTOKENS” will set an opening price of 10USDC per “MYTOKEN”. $0. This is due to a deflationary bug in v1. But I like the project. 11 votes, 14 comments. Jan 28, 2021 · Calculator . To learn more, check out CFI’s Free Finance Courses! The Use of the ROI Formula Calculation. Compare different fee tiers and choose best fee tier for your liquidity pool. A liquidity pool is essentially a group of tokens or assets locked into a smart contract to enable decentralized token swaps, lending, borrowing, and other activities, all on-chain. Fees are not included within results. The impermanent loss calculator showed a Pool ROI of -1. Uniswap v2 uses the equation 2. 30% of the capital you just raised is going to provide liquidity. By tweaking the formula, liquidity pools can be optimized for different purposes. What is a liquidity pool in crypto? Crypto liquidity pools aggregate coins for trading and allow LPs to profit from their coins (earn crypto passive income w Explore the new combined V2 and V3 analytics at app. Choose between 12 or 24-hour staking periods and tap into profitable short-term investments. As the sqrtPriceX96 (price) of the pool changes, the token holdings in each v3 liquidity position could rebalance 4. X is the quantity of the base asset, Y is quantity of the second asset, and K is the product constant of the pool. A decentralized exchange relies greatly on liquidity because of the regular rate at which transactions are made on their Liquidity pools play an integral role in the decentralized finance ecosystem, especially in decentralized exchanges. It also shows any profits gained and estimates the fees you have earned while providing liquidity. Given the ratio of each pool we can say that 1 ETH = 2,000 USDC. As a most basic example, Bob wants to calculate the ROI on his sheep farming operation. APY. One advise i can give is to look at pools with high demand (volume relative to liquidity). Jun 26, 2023 · One of the most important things for an LP is calculating the current holdings of their position(s). Liquidity pooling leads to temporary loss of funds of the liquidity providers due to the volatility in a Apr 24, 2024 · Liquidity pools are simply clusters of tokens with pre-determined weights. Uniswap for example has a very easy interface for this: Uniswap pool creation. 15 BCH-BNB. Liquidity pools are an innovation of the crypto industry, with no immediate equivalent in traditional finance. It is a cornerstone of DeFi since it provides a source of liquidity for users to exchange and interact with various digital assets. A token’s weight is how much its value accounts for the total value within the pool. Top 100 2022 . Upon adding liquidity, you’ll receive LP tokens. vision is an all-in-one, cross-chainliquidity pool analytics and yield farming rewardstracking tool. Top 100 2020 . Simulate. The calculation can also be an indication of how an investment has performed to date. Next, you can try the Simple tab, which has 4 inputs. There are plenty of community-led calculators that Nov 1, 2022 · This means that you’ll need $1. The tool calculates returns in absolute Dec 18, 2023 · A liquidity pool is a collection of funds locked in a smart contract that provides liquidity to facilitate trading on decentralized exchanges. It takes a lot of pretty much pointless work! Sep 11, 2023 · For one, in v2 the liquidity of a pool and the liquidity of a position are conceptually the same, the L = sqrt(x*y) formula works for both. . Mar 29, 2021 · Finally, should the value of one of your assets drop to $0 in value, you will lose the remaining liquidity in the pool. Automated market makers use a simple formula x * y = k. From the beginning until the present, he invested a total of $50,000 into the project, and his total profits to date sum up to $70,000. Instead of one big pool of varied assets, pools are created much like the traditional “trading pairs”. . Uniswap v3 allows to concentrate liquidity, and the total liquidity is described by the equation 2. 1065871. Strategic Solutions for Enhanced LP Returns. The loss takes place only when a liquidity provider withdraws the Liquidity Pool (LP) tokens. Incorporate a risk measure for evaluating different positions. Start with Token A by inputting the starting price and the ending price. To find these values we need the contract address of the liquidity pool. Users contribute their assets to a liquidity pool and receive Oct 4, 2020 · There are more than 200 vaults and 2000 liquidity pools in the market. Rather than traditional order books containing buy and sell orders, most DEXs use automated market makers (AMMs) to facilitate trades Nov 27, 2023 · Liquidity pools are created when users (called liquidity providers) deposit their digital assets into a smart contract. In Uniswap v3, the liquidity of a position is still computed by L = sqrt(x*y), but x and y here are virtual assets. If a pool is included by governance then it will be allocated a share of incentives based on several factors such as type of asset, swap fees generated in the pool, age of listing and sustained volumes. The ratio of tokens in your pool sets the price. Calculate your PancakeSwap v3 positions fee returns, APY, APR, ROI, yields, and impermanent loss based on how much pool liquidity you provide. The simplest version of a DeFi liquidity pool holds two tokens in a smart contract to Jul 18, 2022 · A liquidity pool is a collection of cryptocurrency funds grouped into a smart contract. Nov 16, 2023 · A liquidity pool is a crowdsourced pool of cryptocurrencies or tokens locked in a smart contract that is used to facilitate trades between the assets on a decentralized exchange (DEX). They can also be used for a variety of other purposes — many of which unlock additional revenue streams for the liquidity provider. The basic formula for ROI is: ROI =. Feb 9, 2021 · LP Token Formula: We need the total value of the pool and the circulating supply of LP tokens. The price of the pool is moved by users trading against the pool’s liquidity, thus shifting the balance in the holdings of LPs. So impermanent loss is the opportunity cost relative to holding the assets at fixed quantities. Although, this tool has several assumptions. For institutions and individuals interested in providing Liquidity in pools on the Uniswap Protocol, the Foundation is the best place to find resources and tools, to help you participate in the network. Like any investment opportunity, investing in crypto and DeFi markets comes Here's the ELI5 version: When one side of the pair goes up in value relative to the other, you will see the amount of that token in the pool decrease. Calculate the value of the holding in your pool (I use tin. Connect a wallet. Aug 19, 2019 · One other thing to understand about how this works is that when you deposit liquidity, you are depositing your crypto and you’re receiving back a Uniswap token. Jan 10, 2023 · However, the ratio of ETH and USDC in the pool has now changed, consisting of less ETH and more USDC. Stay Informed and Adapt: Maintain an informed outlook on market conditions to manage their positions proactively, mitigating the risks of impermanent loss where possible. $3,874. In return, the investor receives liquidity pool tokens which represent their proportional share of the pool and allows them to withdraw that share at any time. 01% of the pool Calculate amount of daily volume that goes into fees: $1,000,000 * 0. For example, the v2 DAI/USDC pair utilizes ~0. Each liquidity pool will have a specific composition of assets (usually 2-3 specific tokens) where the amount of Token A + Token B = 'LP AB', and liquidity A. Price divergence or impermanent loss is never great news. 9% with a HODL type of 50%/50% for both assets in the pool. Join us in showcasing the cryptocurrency revolution, one Your active V3 liquidity positions will appear here. Calculate hypothetical profit & loss (PnL), return on investment (ROI), and liquidation price before placing any orders on crypto futures trades. May 8, 2023 · One primary source of passive income for liquidity providers is the share of transaction-generated fees earned by the liquidity pool in proportion to their investment share. Mar 10, 2024 · As such, I’m incentivized by liquidity pools to provide an equal value of two tokens in the liquidity pool. But it's not really important to know all the fine details of how it works. 0472 ETH, I received back 0. Then continue with Token B by doing the same. Join the waitlist! Launch App. Jun 28, 2023 · June 28, 2023 Upd on March 13, 2024. Each liquidity pool consists of two tokens, that’s why liquidity pools are also referred to as pairs. Here we've curated technical tools, automated LP services, and content to help you provide liquidity. 20) while the second asset remains stable (b = 0). Apr 28, 2022 · 4 — Be aware of token price divergence within a pool. 1 from the v3 whitepaper, where L = sqrt (x*y). And then, even if you make that calculation manually, you'll still need to compare it to all your DeFi positions to contextualize it. These pools provide much-needed liquidity, speed, and convenience to the DeFi space. Liquidity pools are intended to replace traditional order Set Strategic Investment Parameters: Align liquidity provision with their broader investment goals, considering the nuanced risks and rewards of a V3 position. The whole 0. Top 100 2021 . Investors can compare liquidity ratios across similar companies within the same industry to identify potentially safer investments. 57% of total. On top of that, we now have multiple groups of farms which have their own stream of CAKE emissions. Don't see your project? Dec 5, 2018 · Learn the importance of liquidity in finance and crypto markets and how it impacts asset conversion, risk, market efficiency, and investment decision-making. • 3 yr. Heatmap . Impermanent loss is the difference between simply holding a crypto token in comparison to providing liquidity for the crypto token. A liquidity pool is a collection of funds locked in a smart contract on a decentralized finance (DeFi) network. Swap or provide liquidity on the Uniswap Protocol. To participate, you simply contribute your cryptocurrencies to a liquidity pool on a decentralized exchange. Dec 11, 2020 · 4. 0001 = 0. People . DAI/ETH can be a good example of a popular liquidity pool on Uniswap. Liquidity mining is a way for users to earn rewards by providing liquidity to decentralized exchanges or protocols in form of tokens. 25% trading fee. Gain from Investment - Cost of Investment. The BPT token is a reward for providing liquidity to the pool. get Oct 21, 2023 · Liquidity pools operate with pairs of cryptocurrencies. 01, the price range in which LPs would expect to see the most volume - and consequently earn the most fees. We're working on a video course for Liquidity Providers. Providing Liquidity. $70,000 - $50,000. Monitor Katana exchange pools, including AXS and SLP pools on the Ronin chain. Top pools ↗. They can also be staked in some protocols for additional rewards. 30 -5. Crypto Analytical Tool for DeFi Traders Dec 9, 2023 · Evaluating investment risk: A low liquidity ratio might indicate a higher risk of short-term financial distress, potentially leading to missed payments or even bankruptcy. There are many factors that go into the calculation of DeFi ROI: DeFi service fees, liquidity & asset exchange rates in the pool. And this is a Uniswap token that’s specific to the pool that you’re in. But if you choose a profitable Uniswap liquidity pool, you can get up to a 18. When you decide to become a liquidity provider and participate in a pool, you’re required to deposit assets of equal value for both cryptocurrencies within the pair. If you pick a bad liquidity pool, you will earn as little as 0. A fundamental principle of liquidity pools is maintaining a fixed 50/50 ratio for the value of both assets within the pool. Different DEXs may charge a fixed trading fee on all orders distributed to the LPs. Find current ratio, quick ratio, cash ratio, and working capital. These tokens represent your share of the pool and entitle you to a portion of the transaction fees generated by the pool. I’ve created a simple webapp to track the P/L of each liquidity investments on Uniswap. Experience the innovative Dual Investment from ReHold and unlock high APY through DEXs' Liquidity Pools with precise price ranges for concentrated liquidity. Users of DeFi protocols "lock" crypto assets into these contracts, called liquidity pools, so others can use them. One of the liquidity pools’ most popular uses are decentralized exchanges operating on the automated market maker (AMM) model. IMX/USDT Liquidity Pool Sep 29, 2022 · Liquidity pool tokens (sometimes known as liquidity provider tokens) are given to users who provide liquidity in liquidity pools. Explore Uniswap Analytics. See full list on coingecko. For example, Uniswap has a 0. network for this). And each group of farms shares separated sets of multipliers. 2 million in capital in the liquidity pool. Oct 14, 2023 · Suppose you provide liquidity to a pool with a 1:1 initial price ratio (r = 1), and the first asset experiences a 20% increase (a = 0. You need to enable JavaScript to run this app. Liquidity providers receive a share of trading fees as incentives for providing liquidity, although they are exposed to risks such as impermanent loss and slippage. Discover, simulate, and track concentrated liquidity pools for leading DEXs. Osmosis currently only incentivizes pools Search Comments. Jun 17, 2021 · A liquidity pool is usually composed of 2 cryptocurrency tokens that create a market for anyone wishing to exchange between the 2. The final aspect in any discussion on liquidity pools explained properly refers to the risks associated with them. Jun 8, 2022 · Popular liquidity pools, such as the Ethereum-USDC liquidity pool on Uniswap, earn fees equivalent to about a 25% annual interest rate. There are other use Nov 8, 2021 · Setbacks in Liquidity Pool Concept. Top 100 2023 . Since Alice owns 10% of the pool, she would receive 0. 50% of the total available capital for trading between $0. 99 and $1. After a certain amount of time, LPs are rewarded with a fraction of fees and Feb 22, 2024 · This is because LPs are incentivized to deposit their idle cryptocurrency into liquidity pools by earning profits on trading fees. 8% but a HODL ROI of +2. Enter the app. 04147 Uniswap tokens. Mar 12, 2024 · Liquidity mining is a way to earn rewards by lending crypto assets to DeFi platforms (Decentralized Finance Platforms). You can also use your LP tokens to compound interest in a yield farm, take out crypto loans, or transfer ownership of the Nov 4, 2021 · A liquidity pool is basically a reserve of a cryptocurrency locked in a smart contract and used for crypto exchanges. Make sure to keep this all in mind as you invest and never invest more than you can afford to lose. For example, Uniswap pools involve two tokens with 50–50 weights. uniswap. Convert that to CAKE with CoinGecko or similar. Subscribe. 19% Daily. After the investment period, considering rewards earned and potential impermanent loss, the calculator updates the pool shares. Find the most profitable opportunities before others. You will receive tokens and fees as incentives based on the quantity of crypto you provide. When a user provides liquidity, a smart contract issues liquidity pool (LP) tokens. Learn about providing liquidity ↗. The crypto liquidity pool for ETH/BTC, for example, is holding both Ether and Bitcoin, enabling anyone interested in Long story short, my investment in a number of uniswap LP turned out to be very profitable (l will not go into details here). Becoming a liquidity provider is easy. DeFi. This tool uses historical data from the selected pool to show a simple ideal case scenario on how much fee you could potentially earn for providing liquidity to Uniswap V3 for the selected tokens and fee tier. When someone places a trade, trading fees are deducted from the Feb 21, 2021 · Price impact is a bigger issue in lower liquidity pools where it's easier to change this ratio compared to a pool with very large liquidity. These smart contracts power almost every part of DeFi, and they will most likely continue to do so. This tool allows you to calculate impermanent loss and other losses associated with providing liquidity to certain DEXes on the TRON blockchain. This is a function of arbitrage bots interacting with the automated market makers. kfx2. Simulate prices ranges to determine which pools have the best returns. Note: May not be accurate for averaged positions Feb 21, 2024 · Step 6: Receive Liquidity Pool Tokens. Liquidity Pool Metrics: Based on the initial amounts of tokens supplied to the liquidity pool, the calculator computes the initial pool shares for each token. As an example, let's say there is a liquidity pool with 1,000 ETH and 2,000,000 USDC. The total value of Asset A must remain equal to the total value of Asset B. 0001 = $0. It is a pool of assets, containing both tokens that traders are interested in. 2 in the whitepaper. Develop a metric for identifying the Nov 6, 2023 · Liquidity pools are one of the core technologies behind the current DeFi technology stack. Nov 11, 2023 · Calculate several values relating to liquidity of a business. 07% Yearly 2920. See today's DeFi yield farming rankings ️ Listed by total value locked in ️ Curve ️ Yearn ️ Ethereum based tokens ️ And many more ️. Determine Optimal LP Strategy. For instance, this is LINK-ETH pair on Uniswap, where we can see that the contract These LP tokens represent each user’s share in the liquidity pool and can be returned to the platform to retrieve the tokens they represent. A liquidity pool is a collection of cryptocurrency tokens locked into a smart Dec 20, 2023 · Input your percentage change of token A and percentage change of token B to get the total impermanent loss. I'm not sure where you got your number 12996064 from, I can't find it one the flipsidecrypto website. These shares represent your ownership stake in the pool. At a price of 4,000 USDC, there should be 5 ETH and 20,000 USDC currently in the liquidity pool. Click the “Add Liquidity” button to determine the parameters of your pool investment. Find the most profitable liquidity pools, calculate liquidity pool performance, impermanent losses and track yield farming rewards in one place. Crypto liquidity pools basically allow users to pool their assets in DEXs’ smart contracts and provide asset liquidity for traders to swap The algorithms by which an AMM calculates prices, pool token issuance, and exchange rates can be difficult to easily understand. Aug 24, 2021 · ImpermanentLoss = PoolValue / HoldValue – 1. As discussed in several posts, the return for the Liquidity Provider (LP) is function of the accrued fees and the effects of price variations (the “impermanent loss”). Anyone with an internet connection and in possession of any type of ERC-20 tokens can become a liquidity provider by supplying tokens to an Mar 2, 2023 · DeFi activities such as lending, borrowing, or token-swapping rely on smart contracts—pieces of self-executing codes. 002 = $2,000 Calculate the share of the fees that I get: $2,000 * 0. Another commenter linked a calculator. I'll refer to this as the market rate. Instead of traditional markets of buyers and sellers, many decentralized finance (DeFi) platforms use automated market makers (AMMs), which allow digital assets Data platform for DeFi investors and protocols. Check out our v3 LP walkthrough and migration guides. Calculate your Uniswap v3 positions fee returns, APY, APR, ROI, yields, and impermanent loss based on how much pool liquidity you provide. One of the foremost risks you can find with the liquidity pool is impermanent losses. Learn more about how liquidity provider tokens work now. These tokens represent the liquidity provider's share of assets in the pool. 5 ETH and 2,000 USDC if she chooses to withdraw her assets, which would be worth $4,000. Each vault or pool offers different ROI based on different measurements and viewpoints. Oct 2, 2023 · Users supply liquidity pools with tokens and the price of the tokens in the pool is determined by a mathematical formula. I am looking in to different compounding strategies and…. si bt es fu uc sa wy jj mj un