Rewards

There are two ways to understand the returns from Origami lovToken vaults. First, we can evaluate the actual price changes to the vault share price over time. Since the vault share price at any given moment in time determines how much of the underlying reserves you can redeem, this vault APR can be understood as the realised APR. A second way to understand the returns from the Origami lovToken vaults is by multiplying the "native yield" of the underlying yield-bearing token e.g. sUSDe and weETH by the leverage factor of the vault. Then we subtract the cost of the leverage and Performance fees from that leveraged yield. This vault APR can be understood as the estimated APR or eAPR. Both the realised APR and the estimated APR should converge to approximately the same number over time. The realised APR is more volatile and is heavily impacted by user entry and exit fees. The eAPR ignores the effect of user entry and exit fees and assumes that they even out over time in terms of impact to the share price. On the Origami dApp, we only provide the eAPR to allow users to more easily evaluate the vault yield they can expect in the long run. The share price is used for vault withdrawals (redemptions).

How We Calculate Implied APR for Ethena Sats

While there is no officially recognised APR for Ethena Sats or any other Points, we can estimate an implied APR based on the market price that users are willing to pay for the Points "yield" in the Pendle YT market. The formula below shows how we calculate the implied APR for Sats:

Implied APR Formula Terms Defined:

How We Calculate Implied APR for weETH Loyalty Points and EL Points

Applying the same logic that we used above for Sats, we can estimate the implied APR for ether.fi Loyalty Points and EigenLayer Points by utilising the Pendle Finance YT token price oracle:

weETH Points Implied Yield is a sum of both ether.fi Points and EigenLayer Points.

Total APR - A Share Price Based Calculation for Origami Vault Returns

The APR for the levered Origami Vault or lovStrategy is calculated as follows:

where:

$P_{prev} = [\frac{lovToken}{Token}] \text{ from } t \text{ days ago}$

$T_{prev} = t\text{ days ago}$

$P_{current} = [\frac{lovToken}{Token}]$

$T_{current} = \text{now}$

By combining the Vault APR stemming from Native Yield and the Points APR, we can calculate the Total APR as follows:

eAPR - A Stable Estimate for Origami Vault Returns

To protect against economic attacks, Origami vaults impose fees when users enter and exit the vault. These fees accrue to the vault reserves and thus to the vault share price as well. These share price fluctuations create a challenge for a user to estimate the true underlying yield for a vault, particularly when Origami vault flows are high.

In response to user feedback, we have created an Estimated APR (eAPR) metric that better reflects the underlying or ongoing yield for each vault. The eAPR metric is not impacted by volatility stemming from vault entry or exit fees.

The eAPR is calculated as the net spread between the native yield APR of the underlying reserve token e.g. native wstETH yield from Lido Staking activities, and subtracting all incurred costs in APR terms i.e. borrow interest and Protocol fees. By totaling these APR values, we can derive the eAPR (and the eAPY) for each vault. See the infographic and the screenshot below for a visual breakdown of eAPR.

Origami Protocol Fee APR

ROE - Calculating return on equity for directional vaults