Staking APR
Last updated
Last updated
Stakers are rewarded for their service of providing liquidity and facing impermanent loss on the 80/20 Balancer pool. Rewards currently come from 3 sources, which are reflected in the staking APR:
Balancer swapping fees
wstETH bearing yield (since this is the currency paired with TANGO on the Balancer pool)
Staking rewards coming from Contango protocol fees
Let's dig more into how fees are collected, transfered and then computed into the APR:
The process is as follows:
Trading fees are collected on each chain in a fee collector contract (0xfee97c6f9bce786a08b1252eac9223057508c760).
When a given threshold is reached, fees are converted to a basket of blue-chip currencies and swapped to the fee collector contractor contract on Arbitrum to minimize transaction costs.
When a given threshold is reached, the fees from the fee collector on Arbitrum are sent to the reward distributor on Arbitrum (0xb35b3004125e342d9a996e1b274fe85cc22d46f2).
Protocol fees are distributed weekly according to the share of veCBPT, through a basket of blue-chip currencies (e.g. ETH, WBTC, USDC). This basket will eventually be optimized over time to minimize swapping and bridging costs, since Contango collects fees at the UI level in a wide variety of currencies and chains.
Once staked, on the Staking page you find two APRs:
The max staking APR you could get if your CBPT are staked for the maximum duration, i.e. 52 weeks.
Your estimated APR for a given week.
This is how your staking APR is computed:
Get the total fees available in the Reward Distributor Contract, minus the fees which have not been collected yet in the previous weeks.
Multiply this number by your share of total veCBPT on Thu 00:00 UTC.
Assume no more fees will be collected during the week, annualize this number and divide it by the value of your CBPT staked.
Example:
Your CBPT staked value is 10.24$.
Your share of the total CBPT is 0.42% on Thu 00:00 UTC.
You are going to receive 0.082$ of fees.
Your APR is 41.64%.
