Polars: How much can you earn? (yield calculator)
Over the past few weeks, we have held quite a few meetings with potential partners and investors, received a lot of feedback and questions from our future users. Many of those with whom we talked helped us figure out how the platform would work, and how much you could earn with it. That is why they became our followers immediately. But many do not yet realize all the capabilities of the platform, so they are afraid of the lock-up period for participants in the private sale, and they are also afraid of the not so small hardcap. Some did not even want to understand how the platform was arranged, but thought and asked only about how much X would make the token immediately after listing.
In this article, we will try to convey to you information about what fundamental capabilities the Polars platform contains for each of you. We have developed a calculator and put it in a google table so that you can copy it to your own account and play with the numbers, assessing the earning opportunities in different conditions. After studying this article, you should have no doubts about the advisability of owning governance tokens even under a lockup period, and you will be able to assess the long-term earning opportunities within the Polars project.
User categories
First, let’s divide users into several types:
- Better, trader, gambler.
- Arbitrator
- Liquidity provider (market maker)
- POL Holder
In this article, we will consider in more detail the earnings for the 3rd and 4th user groups (for liquidity providers and POL Holders), and we will consider the capabilities of the first 2 groups superficially, since this is a topic for separate articles.
Polars Business Model
Also, let’s clarify the business model of the Polars platform. For a simpler understanding, our business model can be compared to the Uniswap business model: Users do swaps on the Polars platform and pay a commission for each swap they make. These commissions are the platform’s income. Commission income is distributed between 3 areas:
- 50% is shared by liquidity providers
- 20% goes to the Base Pool as additional collateral for polar tokens.
- 30% is distributed among Аdvanced Users.
Read more about this in the article Polars: Platform distribution of income from trading fees
Additionally, the platform has a POL token rewards program depending on activity on the platform. You get rewards in POL tokens if you supply liquidity to polar tokens, make trading volume, invite referrals who make trading volume or participate in voting.
More on this in the article Polars Farming mechanics
If you are a liquidity provider (market maker)
In order to become a liquidity provider, you need to add WHITE and BLACK tokens to the liquidity pools on the Polars platform. The liquidity provider has 4 sources of income:
- 50% of commissions for completed swaps are distributed among liquidity providers
- 20% of the commissions for completed swaps go to the Base Pool, which increases the aggregate price of polar tokens. The liquidity provider owns the same amount of WHITE and BLACK tokens, so when their aggregate price increases, the market maker’s capital also increases.
- Yield Farming. The liquidity provider receives rewards in POL tokens. Read more about this here.
- 30% of commissions for completed swaps are distributed among Advanced Users. Since the liquidity provider receives rewards in POL, it can receive income for these tokens. More on this in the next section of this article.
We propose to copy this google sheet and fill in the data in the yellow cells:
- Total amount of minted WHITE & BLACK tokens
- The number of your WHITE & BLACK tokens
- Polar Token Trading Volume
- Total number of POL tokens in staking
- The number of your own POL tokens staking
- POL Price
In the basic example, we have 10m minted WHITE & BLACK tokens, 100k of your WHITE & BLACK tokens, $ 300m Polar token trading volume, 550m total POL in staking and 1m you own POL tokens in staking. With these parameters, the liquidity provider will earn $ 11574, of which $ 8520 as a liquidity provider, $2400 as a BLACK & WHITE Holder and $ 654 as a POL Holder.
You can change any indicators, and get your own results to understand the approximate income.
If you are Advanced User
In order to receive a part of the commissions of the POL platform, Holder must put its tokens into staking. The share of commissions intended for a specific user is calculated based on his share of POL tokens in relation to all POL tokens that are staked.
We propose to copy this google sheet and fill in the data in the yellow cells:
- Total number of POL tokens in staking
- The number of your own POL tokens staking
- Polar Token Trading Volume
In the basic example, we have 550m total POL in staking, 1m you own POL tokens in staking and $ 300m Polar token trading volume. With these parameters, POL Holder will earn $ 654.
You can change any indicators, and get your own results to understand the approximate income.
If you are trader / better / player or arbitrator
Of course, we cannot call the rates and forecasts earnings, since the user can either guess or not guess, therefore he can both earn and lose his money. But even with this in mind, a user who trades polar tokens also has a stable income — Yield Farming based on trading volume. The more a user makes in trading volume, the more he receives rewards in POL tokens for this.
Arbitrageurs have constant price convergence opportunities between the secondary pool and all other pools where polar WHITE and BLACK tokens are traded. Since the prices of polar tokens are fixed in the secondary pool and only change at the end of each event, this creates a constant need to equalize prices in all pools, since there is no slippage in the secondary pool.
Output
It is important to understand that even those POL tokens that have a lock-up period participate in the distribution of the platform’s income. Therefore, it is important not only to assess the growth potential, but also to delve into the fundamental foundations that lie in the economics of the project. This will allow you to assess the risks and possible scenarios for future developments.
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.
