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Calculation

Thanks to Uniswap for being the pioneer of mathematical logic to manage liquidity and their successful application in building the gold standard of DeFi. Several concepts in Sigmaswap are retrieved from UniswapV2. Additionally, many features require understanding in calculation on both developer, and end user sides which are built on top of the original code to fulfill the decentralized finance ecosystem and to deliver the best user experience.

Liquidity​

Derived from the UniswapV2 to visualize the result in an exponential graph, here.

Or

Users can simply use Liquidity Calculator to visualize the outcome.

note

In reality, changes in liquidity reserves occur all the time. For any specific use that require real-time data accuracy, please refer to Oracle.

Mining Rewards​

Reward emission is assigned to be constantly released. However, there are factors that cause each miners receive unstable daily returns.

  • One is depending on the overall value deposited. For example, pool A and pool B have a default APR at 100%. Then people deposited into pool A, resulting in a new APR of 20% while people deposited less in pool B, resulting in a new APR at 80%. In case that each user deposit the exact same value in both pools, the people who deposited assets in the pool B have 4x more return-on-investment rate (ROI) than the people in pool A.
  • Reward types and amounts. As mentioned in Liquidity Mining, rewards in each mining pool are different in amounts and currencies, and this directly affects APR. Users must understand the risks and calculate the return rates before making any investment.
  • Compounding is another way to increase ROI. Users might calculate how much they could earn after compounding their deposit with newly gained rewards in different time range ( i.e. hourly, daily, weekly), then deduct gas fees and create the best investing plan.
  • Sigmaswap protocol has a method called buyback & burn. Burned tokens are sent to the contract that all liquidity miners eventually allow mine again. Its effect extends the period of reward distribution, but does not change any APR.

Staking Rewards​

  • As the rewards here come from trading fees (0.045%), users can estimate the output of APR by looking at the daily trading volume and total history trades.