💰Yield Calculation

Are you curious about how Zup Protocol calculates liquidity pool yields? You’re in the right place.

Calculating 24h Yearly Yield

Calculating the 24h yield of a liquidity pool is simple math. First, divide its 24h fees by its TVL, then multiply by 100 to get the yield as a percentage (this gives you the literal 24h yield). Finally, multiply by 365 to get the yearly yield

$$x = (\frac{y}{z} \times{100})\times {365}$$

$$\text{24h Yearly Yield} = (\frac{\text{24h Fees USD}}{\text{TVL USD}} \times{100}) \times{365}$$

Calculating X Days yearly Yield

Calculating a yearly yield for more than 24 hours (or for multiple days) is a bit more complex than calculating the 24h yearly yield. In this case, we use the average to obtain a more accurate yield

1. You must first calculate the 24h yearly yield for each day (e.g., for 30 days) using the same formula above

2. Now, calculate the average of all the yields by summing them up and dividing by the number of days (e.g., 30).

3. Done! You now have a precise average yearly yield based on data from several days

$$x =\frac{\sum_{i=0}^{n}{((\frac{y_i}{z_i}\times{100})\times{365})}}{n}$$

$$\text{X Days Yearly Yield} =\frac{\sum_{i=0}^{n}{((\frac{\text{Day 24h Fees USD}_i}{\text{Day TVL USD}_i}\times{100})\times{365})}}{n}$$