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Doubt about liquidity pool

Binance

Cryptocoins Exchanges / Binance 263 Views

Hi community,

Im having some trouble understanding how APY is calculated on liquidity pool in binance.

Im seeing DUSK/USDT pair it says it haves 70% APY , but then on info it says you win 70% of dusk.

So then if i put 100 DUSK i have to put 10USTD (aprox). Thats an initial investement of 22USTD

Then if i win 75% dusk ill end up with 175 dusk + 10 USTD which gives me 30 usdt. Thats waaay less than 70%.

But then I went ahead and tried it with little money. And 3 days have passed price is almost the same as when I started so no PNL or impermanent loss.

And then I went ahead and annualize my earnings and I have something closer to 70%. Which got me confused , obviously 3 days is not a represetative sample, could be 3 good days.

But it left me wondering how can I calculate the real APY of the liquidity pool.

Thanks in advance

Edit: I think I got it , the 75% is 75% of your whole investement , but payed in dusk.
In this case 75% of 22USDT which is 16USDT but payed in dusk its 138 which is way higher than 75 dusk. That was my mistake.

Edit2: If you are reading this and learning , be careful I didnt speak about impermanet loss here! ITS IMPORTANT!

submitted by /u/ItsNecessaryRightNow
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