APR: A Day by Day Breakdown

The following shows day by day APR & key fee events for a given mASSET under stable market conditions.

Note: Actual APR jumps are instantaneous but have a sloped line due to Google graph constraints :)

For illustrative purposes we will look at the first 42 days for a $900 UST investment on mCOIN.

• The following assumes a Target Collateral Ratio of 200%

• The following assumes there is no material price premium or discount between mCOIN & the oracle price

• The following assumes the short & long farm APR as well as $MIR & $SPEC token price remains constant for first 42 days

• The following also assumes low volatility for mCOIN price for the first 42 days (volatile assets will trigger rebalances which will eat into APR)

APR calculations are based on 3/29/2022 spot APR rates for the mCOIN delta neutral pool

Note:

Listed APRs above are proportionally weighted. For example, Anchor Earn at time of publication was ~19.5% but we’re displaying it here as 12.93% to reflect the ⅔ of the investment that is in Anchor Earn.

Day by Day APR Breakdown:

Day 0: -0.16% APR

• Immediately upon opening the position you will have a slightly negative balance primarily due to the ~0.3% TerraSwap fee on short sale proceeds & the long position.

• Day 0 = $900 - short sale TS fee - long buy TS fee

A ~$1.25 Terra gas fee is required to open the position

Day 1-13: +18.28% APR

• Not yet full APR potential, only yield is from short farm (+5.35%) & Anchor deposit (+12.93%). By Day 4 the negative position should be reversed.

• Day 13 Value = Day 0 Value x ((5.35% + 12.93%) * 13/365)

Day 14: +18.28% APR - Spec Fee

• Proceeds from short sale arrive (less the TerraSwap fee from Day 0) & are married with long position to initiate long-farm, spectrum fee incurred

• Day 14 Value = Day 13 Value + 1 Day of Short & Anchor Yield - Spectrum Fee

Day 15-42: 39.68% APR

• Long-farm is live & thus the DN strategy is running on its full APR potential.

• Day 42 Value = Day 14 Value + Day 0 * ((5.35% + 12.93% + 21.4%) * 28/365)