How Fantom Block Creation Time Impacts Our APY
You might have noticed an unexpected change in staking APYs across the entire DeFi ecosystem, which is also affecting the yield returns of our products, including (3,3) staking, 5 day ROI, Accelerated Staking and also the 30 days ROI.
In this article, we explain how the change in APYs is directly related to the Fantom Block Creation Time and why you, dear investor, do not have to lose your sleep over it 😉
At Balance, our top priority is to protect the interests of our investors and to stay transparent. To that end, we will show you how we use mathematics and principles of finance to make sure that our APYs remain within the desirable range.
Before we share the details, let us first analyze the Fantom Average Block Time Chart.
In the last month, i.e., April, Fantom Block Creation Time has fluctuated wildly. Earlier this year, the blocks were created in under 1 second. In recent weeks, however, this creation time has increased from 1.2 seconds to even 1.5 seconds, which is an increase of almost 50%.
APY & Block Creation Time In Fantom Blockchain
Within the Balance ecosystem, APY and Fantom’s block creation time are correlated. In order to find the perfect APY for our investors, we use block creation times in our calculations. Thus, any change in the block creation time has a direct bearing on the APY value. Let’s look at some equations and basic mathematics to understand this further. Don’t worry, we won’t overwhelm you 😉. It is our goal to show you what goes on in the backend and, more importantly, what we do to make sure our investors get the best returns, even in these turbulent times.
APY In (3,3) Staking
To get the APY value in (3,3) staking, we need Rebase Per Day value and Staking Rebase value. Let’s see how to calculate these in the below equations.
Equation 1: How is the Number of Rebases Per Day calculated:
We can see that the longer it takes to create a block (secondsPerBlock), the lower the Number of Rebases Per Day value will be.
Equation 2: How we calculate Staking Rebase, i.e., the fraction of staking reward over the total amount of FHM within the distributor shared per rebase
Equation 3: Finally, we calculate Staking APY as:
We can see that decrease in the number of rebases per day also decreases the APY.
5 days & 30 days ROI
Equation 4: How is 5 days ROI calculated:
If the time to create the block increases, the number of rebases per day decrease which in turn decreases the 5 day ROI.
Equation 5: How is 30 days ROI calculated
If the time to create the block increases, the number of rebases per day decrease which in turn decreases the 30 day ROI.
Accelerated (6,6) Staking APY
Equation 6: 30 days ROI of Accelerated Staking is calculated as follows. Note that thirtyDayStakingRebase is the percentage increase of staked FHMs per rebase over the 30 days period.
Still have questions? Reach out and we glad to support.
About FHM, USDB, and Balance
The Balance Organization is formed to administrate business development in service to the greater vision of the interplay between FHM and USDB. As such, profits from all ventures engaging $USDB as a commercial exchange of value will be used to buy back and burn FHM in order to increase our deflationary velocity at a rate tied to our business success in product developments.
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