# Polars: How Much Liquidity Providers Can Earn (Calculator)

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In the previous article, we found out why we can guarantee the basic trading volume on the platform, even if users do not bet. We concluded that being a liquidity provider in the Trade Pool is extremely beneficial as you get guaranteed returns due to the underlying guaranteed trading volume.

We have created a profitability calculator for liquidity providers and in this article we will show you how to calculate potential profitability with this calculator. Let’s Go!

# Predicrion Pool & Trade Pool

Polars Prediction Pool is a unique pool where you can buy, sell and swap polar tokens WHITE and BLACK at fixed prices with no slippage. This pool has unlimited liquidity. The user buys any number of polar tokens for BUSD, and can return them back. The price of polar tokens is influenced by the results of external events. After the end of each event, the prices of polar tokens change, and immediately during the event, the Prediction Pool is inactive. If the user wishes to make transactions with polar tokens during the event, he can do this in the Trade Pool at any time.

## Example

Polar Token Price in Betting Pool:
WHITE — \$0.57104
BLACK — \$0.46495

Suppose you have 1000 BUSD and would like to add them as liquidity to the Trade Pool. You will need to add 2 tokens at once: WHITE and BLACK. Therefore, for 1/2 of the available 1000 BUSD (500 BUSD each), you need to buy WHITE and BLACK tokens in the desired ratio.

Current token ratio when adding 1000 BUSD (500 BUSD each) to the Trade Pool:
872 WHITE
1072 BLACK.

This means that we need to buy from Prediction Pool 872 WHITE for ~ 500 BUSD, and 1080 BLACK for ~ 500 BUSD. After purchasing tokens from the Prediction Pool, we can add liquidity to the Trade Pool in the desired ratio and become a liquidity provider.

# Earnings for the liquidity provider

We have developed a simple profitability calculator, in which you just need to enter 3 indicators to calculate the efficiency of liquidity provision in Polars Trade Pool:

## Example

First, make a copy of the calculator for yourself so that you can edit it and paste your data into the yellow cells.

Next, fill in the yellow cells sequentially with data. Let’s start with the total trade volume in the Trade Pool for the month. Let’s assume that the trading volume was \$ 6M per month:

Next, insert the average liquidity of the Trade Pool. Let’s assume it’s \$ 200k:

Next, you need to enter data on how much liquidity you have added. Let’s say we added \$ 10,000:

The data has been added. Now you can see the specific results. We see in the calculator that in total users have paid \$ 18,000 in commissions, of which \$ 12,600 will be received by liquidity providers. Your share of the pool is 5% of the total amount of added liquidity, so specifically, you will receive \$ 630, which with the current parameters is 75.6% APY (excluding farm income):

Please note that in addition to the basic earnings, the liquidity provider receives a reward in POL (as part of the liquidity farming program). You can see this data on the last line. In this case, the liquidity provider will receive an additional 30 POL.

Now you can insert any data in the yellow cells and predict your potential profitability from the activity of the liquidity provider in the Trade Pool. We wish you every success. Thanks for your support.

# Polars

The new DeFi platform for creating secure polar tokens, the price of which depends on the results of specific external events. Within the POLARS platform, users can buy, sell and exchange polar tokens, as well as participate in the distribution of the platform’s commission income.

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Polars.io — The new DeFi concept for the Prediction Market.