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LP Restaking Farms

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.

  1. Liquidity Mining Program Part 1
  2. Liquidity Mining Program Part 2

Check out on How to Use Farms to get started with farming.

{% hint style="info" %} 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. {% endhint %}

PURSE Reward Token

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.

Reward Calculations

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

How do we calculate the APR?

1. Calculating Farm 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

2. Calculating LP Reward APR

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:

PancakeSwap Top Pool

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

{% hint style="info" %} 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 {% endhint %}

  1. 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
  2. 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%