# Staking APR

Stakers are rewarded for their service of providing liquidity and facing impermanent loss on the [80/20 Balancer pool](https://balancer.fi/pools/arbitrum/v2/0x1ed1e6fa76e3dd9ea68d1fd8c4b8626ea5648dfa0002000000000000000005cb). 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

<figure><img src="https://3340088086-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F8rJ5VtVb4DsRxSyBXhOT%2Fuploads%2FWuSkoCqt10zvLgKWhBqT%2Fimage.png?alt=media&#x26;token=038d9442-2266-4757-a62a-62f7fb0acc75" alt="Screenshot of staking APR"><figcaption></figcaption></figure>

Let's dig more into how fees are collected, transfered and then computed into the APR:

## Protocol fees collection

The process is as follows:

1. [Trading fees](https://docs.contango.xyz/basics/key-features#fees) are collected on each chain in a fee collector contract (`0xfee97c6f9bce786a08b1252eac9223057508c760`).
2. 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.
3. When a given threshold is reached, the fees from the fee collector on Arbitrum are sent to the reward distributor on Arbitrum (`0xb35b3004125e342d9a996e1b274fe85cc22d46f2`).

<figure><img src="https://3340088086-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F8rJ5VtVb4DsRxSyBXhOT%2Fuploads%2FhsrIJz73K82qO8e3LwrM%2Fimage.png?alt=media&#x26;token=585a5a3c-d8d6-4722-8dd5-23a32aca1221" alt="Diagram explaining fees collection and distribution to stakers" width="563"><figcaption></figcaption></figure>

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.&#x20;

## APR overview

Once staked, on the [Staking](https://docs.contango.xyz/app/staking) page you find two APRs:

1. The *max staking APR* you could get if your CBPT are staked for the maximum duration, i.e. 52 weeks.
2. Your *estimated APR* for a given week.

<figure><img src="https://3340088086-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2F8rJ5VtVb4DsRxSyBXhOT%2Fuploads%2FmP48KweTt6S71KO6R8Wx%2FScreenshot%202024-12-05%20at%2015.29.32.png?alt=media&#x26;token=a9d0bacd-bec6-4a1a-83c7-26a7fe4c1811" alt="Screenshot of staking page showing two APRs" width="563"><figcaption></figcaption></figure>

## APR computation

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%.