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How is the APR calculated?
How is the APR calculated?

In this article, you can find how the APR for staking PSP is estimated for the Basic and Boosted Pools

Nick avatar
Written by Nick
Updated over 2 weeks ago

In this article, you can find how the Annual Percentage Rate (APR) for staking PSP is estimated, whether you stake in the Basic Pool (sePSP1) or the Boosted Pool (sePSP2).

Because of the way the PSP2.0 system is designed, several factors may affect your individual APR and make it diverge from the APR estimations shown. To learn more about it, you can visit the Why does my APR not match the APR shown section.

All APR calculations are based on the data found in the ParaSwap Analytics Dashboard.

General APR

The general APR reflects the overall performance of PSP staking by considering all ParaSwap Revenue and the whole Total Value locked, without differentiating between pools. The formula used to calculate the General APR is:

Where:

  • ParaSwap Revenue = fees collected by ParaSwap valued in USD at the moment of accrual

  • TVL = USD value of the assets staked in sePSP1 and sePSP2

Please note that your individual APR may vary depending on your ParaBoost Score and ParaBoost Share. You can learn more here.

Boosted Pool APR (sePSP2)

The Boosted Pool APR is the estimated general APR sePSP2 stakers can obtain before applying ParaBoosts. It indicates the staking return evolution of the Boosted Pool for each epoch.

Boosted Pool projected APR

The projected APR is calculated to give an idea of the current epoch’s potential APR for Boosted Pool. It’s an estimation based on the revenue accrued so far during the current epoch and the median of the three previous epoch’s revenue, so it changes as the epoch progresses.

The Boosted pool current epoch projected APR is estimated by linearly projecting the total ParaSwap Revenue by the end of the ongoing epoch with the following formula:

Where:

  • Projection of current epoch ParaSwap Revenue = ((Current epoch accrued revenue valued in USD at the moment of accrual / days passed of the epoch ) * remaining days of the epoch ) + Current epoch accrued revenue valued in USD at the moment of accrual

  • Current sePSP2 TVL = Current USD value of the assets staked in sePSP2

Please note that your individual APR may vary depending on your ParaBoost Score and ParaBoost Share. Learn more here.

Boosted Pool previous epoch estimated APR

The Boosted pool previous epoch estimated APR shows the general APR boosted pool stakers got for the last epoch, and it’s calculated with the following formula:

Where:

  • Previous epoch ParaSwap Revenue = fees collected by ParaSwap valued in USD at the moment of accrual

  • Previous epoch sePSP2 TVL = previous epoch USD value of the assets staked in sePSP2

Please note that your individual APR may vary depending on your ParaBoost Score and ParaBoost Share. Learn more here.

Basic Pool APR (sePSP1)

The Basic Pool APR is the estimated general APR sePSP1 stakers can obtain before applying ParaBoosts.

Basic pool projected APR

The projected APR is calculated to give an idea of the current epoch’s potential APR for the Basic Pool. It’s an estimation based on the revenue accrued so far during the current epoch and the median of the three previous epoch’s revenue, so it changes as the epoch progresses.

The Basic pool current epoch projected APR is estimated by linearly projecting the total ParaSwap Revenue by the end of the ongoing epoch with the following formula:

Where:

  • Projection of current epoch ParaSwap Revenue = ((Current epoch accrued revenue valued in USD at the moment of accrual / days passed of the epoch ) * remaining days of the epoch ) + Current epoch accrued revenue valued in USD at the moment of accrual

  • Current sePSP1 TVL = Current USD value of the assets staked in sePSP1

Please note that your individual APR may vary depending on your ParaBoost Score and ParaBoost Share. Learn more here.

Basic Pool previous epoch estimated APR

The Basic pool previous epoch estimated APR shows the general APR basic pool stakers got for the last epoch, and it's calculated with the following formula:

Where:

  • Previous epoch ParaSwap Revenue = fees collected by ParaSwap valued in USD at the moment of accrual

  • Previous epoch sePSP1 TVL = previous epoch USD value of the assets staked in sePSP1

Please note that your individual APR may vary depending on your ParaBoost Score and ParaBoost Share. Learn more here.

Why does my APR not match the APR shown?

The estimated General APR, Boosted Pool APR, and Basic Pool APR may differ from the final individual APR you got or will get for the following reasons:

ParaBoosts

PSP 2.0 is designed to incentivize PSP stakers who add value and perform services to ParaSwap through individual ParaBoosts.

General, Boosted Pool, and Basic Pool APRs estimations do not consider the effect of ParaBoosts as these are done per address and apply at an individual level.

Your final individual APR is influenced by your own ParaBoosts and other staker’s ParaBoosts.

To learn more about how ParaBoost is calculated, visit the following article.

To learn more about your ParaBoost share, visit the following article.

Fee token price fluctuations

ParaSwap epoch’s revenue is calculated by taking the USD value at the moment of accrual of the different tokens collected by ParaSwap as fees.

However, since the implementation of the ParaSwap Fee Collector by Mimic, ParaSwap fees are converted automatically and asynchronously to wETH for their distribution.

Fee token and wETH price variation between the accrual moment and the moment they are swapped to wETH may impact the amount of wETH distributed by the end of the epoch, impacting the final individual APR.

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