Protocols / project information provided by Unified
Every protocol / project essentially has total value locked (TVL) in the form of cryptocurrency assets staked on the protocol / project.
DefiLlama provides a high-level overview of TVLs by protocol / project.
Each protocol / project may have multiple liquidity pools / vaults within it.
In general, users stake cryptocurrency assets into liquidity pools / vaults, and expect to generate a return in the form of rewards or emissions.
When users stake assets into liquidity pools / vaults, they receive a receipt for the deposit, often referred to as a Liquidity Provision (LP) token.
When rewards or emissions have a monetary value attached to them, this allows users to estimate the annual percentage return (APR) that they are receiving on that liquidity pool / vault.
The APR is a function of rewards / emissions (at current rate) over the total value of the liquidity pool / vault.
While rewards / emissions may follow a schedule in which it changes over time, by convention, APR is measured based on the current rate of rewards / emissions.
VFAT provides a tool for users to view liquidity pools / vaults for many protocols / projects (but not exhaustive).
The most useful items of information for users are in the following table.
| Information | Why is this information useful? |
|---|---|
What is the current market value of the user's LP tokens staked in that liquidity pool / vault? | This is based on the market value of the LP tokens staked in the liquidity pool / vault. This is actually based on the number of LP tokens staked by the user in the liquidity pool / vault. However, the actual number of LP tokens is superfluous to the actual market value of the LP tokens. |
What is the APR on the liquidity pool / vault? | This is based on the value of the rewards / emissions of the liquidity pool / vault relative to the total market value of the LP tokens staked in the liquidity pool / vault. Generally, total liquidity pool / vault APR = user APR, since the user's APR is not differentiated from all other users' APR. |
What is the TVL of that particular liquidity pool / vault? What is the user's share of the TVL of that particular liquidity pool / vault? | These 2 measures are usually placed together, because they indicate a user's exposure risk to a protocol / project that may have very little adoption. For example, a liquidity pool / vault may have high APR, but it could be due to low amount of total deposits by all users into that liquidity pool / vault. In this case, the high APR could signify that either users have been fleeing that liquidity pool / vault, or it could be a temporarily high APR because that liquidity pool / vault has not received much deposits yet. If a user deposits into this liquidity pool / vault, that APR may quickly disappear as more adoption takes place. As another example, if a user has a high percentage share of that vault, then that user carries a large exposure to that vault. This may be relevant in case a user wants to manage their exposure relative to others. The more risk is shared with others, there may be more eyes on that protocol / project to monitor it for incidences such as smart contract exploits. |
What is the total amount of the user's unclaimed rewards / emissions in that liquidity pool / vault? | This tells a user if there is a sufficient amount of rewards / emissions for them to claim (relative to the gas costs incurred in claiming them). |
The above 4 information items represent the information that each user should have on a particular liquidity pool / vault that they have participated in. A user should not see liquidity pools / vaults that they have not participated in (as it is superfluous information).
Sometimes protocol / project front-ends fail. VFAT interacts directly with smart contracts and therefore provides 3 useful tools in addition to information:
Users can stake directly into liquidity pools / vaults.
Users can unstake directly from liquidity pools / vaults. This is extremely useful when there is a critical issue involving liquidity pools / vaults and the front end is not available.
Users can claim unclaimed rewards / emissions directly from liquidity pools / vaults.
This is possible because VFAT is based on users logging in via e.g. Metamask for a single address.
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