vAPY Calculation

What does vAPY mean and how is it calculated?

PERQ perpetually exchanges the yield on your deposit for pre-market tokens at a fixed token price, which are then distributed to you at each project’s token generation event (TGE). The fact that these tokens are pre-market means calculating an annual percentage yield (APY) during the campaign is difficult. An APY based on TGE price cannot be relied upon given the rapid price fluctuations that occur shortly after a token starts trading. Instead we have opted to display a variable APY (vAPY).

Our vAPY calculation intends to show the blended historical performance of all of our completed PERQ Launchpools, giving you an indicator of past performance. We use a time-weighted average price (TWAP) in our calculation, averaging the price for the first 14 days of trading for each project - this way we mitigate the rapid price fluctuations that occur around a project’s TGE. Each Launchpool’s APY is then TVL weighted and blended into the vAPY calculation.

The goal of the vAPY is to showcase the average returns that a user can expect if they participated in our pools for full duration, and chose to sell at the 14 day TWAP price. Keep in mind this is a retrospective average: the effective APY on your deposit may vary greatly based on multiple other factors including the underlying project, the effectiveness of yield strategies at the time of your deposit, the duration of your stake in the pool, your loyalty card level, and when you chose to take profit on your token rewards.

As an example for retrospective APY calculation, a Launchpool may utilise a strategy yielding 10% on average, exchanged for Token X at an implied price of 1 USD per token. Token X starts off strong, trading sideways at an average of 4 USD per token for the first 14 days. We multiply the 4x performance with the 10% base yield to reach a 40% retrospective APY that will be weighted by the average TVL of the pool and blended into the final vAPY figure.

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