Since I've started my time on Hive, my perception of what APR stands for has changed a lot. I mainly discovered that there are very creative ways to calculate it...
With the CTPSB project, we try to keep our APR calculation as correct and dynamic as possible, even if this is not always easy. We base our calculation on the following parameters:
A = Calculated token value of CTPSB today
B = Calculated token value of CTPSB 14 days ago
With the following calculation:
((A – B) / B x 100)/14 * 365 = APR
In english, we calculate the difference between the token value of today compared to 14 days ago. Then we calculate the percentage that this represents in comparaison to the token value 14 days ago. We then bring it down to a daily basis and finally multiply it by 365 to get a yearly APR.
Since we take the token value as a basis, this is already the middle price or theoretical price of the token according to the underlying Hive Power on the @ctpsb account. Therefore there isn't any question which price to take into the consideration (buy, sell or middle price). Since we compare it with the value of two weeks back, we get a very up to date number that is pretty dynamic and shows the evolution quite accurately.
The limits of this calculation
For some time, we are trying to keep the APR consistently at 16% APR. However, this isn't always easy from a mathematical point of view. This week for example, with a token value of 3.83 we get an APR of 15.75%. If we increase the token price to 3.831, the APR jumps to 16.43%. This example shows that sometimes it's simply not possible to have the APR at 16% because it would be at a value somewhere in between 3.83 and 3.831 and with 3 digits this is simply not possible. This is the purely mathematical reason why this week the APR is somewhat below 16%.
Here the numbers of this week
| Assets | Amount | Increase over last week |
|---|---|---|
| Hive Power | 35322 | +95 |
| Tokens in circulation | 9223 | -2 |
| Burnt tokens | 2275 | +2 |
| Token value | 3.83 | +0.011 |
| APR | 15.75% | -0.25% |
Learn more about the CTP Swarm Booster:
A project run by @liotes CTPSB