🧑‍🌾Yield Farming

Yield Farming enables users to earn U2U tokens while supporting GroFi Dex by staking LP Tokens.

Explore our How to Use Farms guide to begin your journey into farming.

Reward calculations

Yield Farm APR calculations include both:

• LP rewards APR is earned by providing liquidity.

• Farm base rewards APR is earned by staking LP Tokens in the Farm.

Farm total APR = Farm base APR + LP rewads APR

Why? Because when you stake your LP tokens in a farm to earn U2U, you're essentially providing liquidity to the liquidity pool, thus earning LP rewards alongside!

Calculating Farm Base Reward APR

The Farm Base APR is determined by the farm multiplier and the total liquidity in the farm, which represents the amount of U2U distributed to the farm.

Calculating LP Reward APR

In addition, farmers receive LP rewards for providing liquidity. Here's an example of how LP rewards are calculated:

In WBTC/USDT pair above, we see these values:

Liquidity: $3.43M

Volume 24H: $11.38K

Volume 7D: $53.85K

• Calculate yearly fees

  • Use the 24-hour volume to calculate the fee share of liquidity providers in the pool, based on the 0.05% trading fee structure: $11,380 * 0.05 / 100 = $5.69

  • Next, use that fee share to estimate the projected yearly fees earned by the pool based on the current 24-hour volume: $5.69 * 365 = $2076.85

• We can now use the yearly fees to calculate the LP rewards APR: That's yearly fees divided by liquidity, multiplied by 100: ($2076.85 / $3,430,000) * 100 = 0.06% LP reward APR.