Maximum Boost
How to calculate the maximum boost possible and what effects it.
Last updated
How to calculate the maximum boost possible and what effects it.
Last updated
Under certain conditions, specifically larger liquidity deposits, a maximum boost of less than 2.5x becomes apparent. The logic behind this is that there is only a finite number of incentives going to a pool, for example 10,000 BAL. Regardless of boosting, the pool's 10,000 BAL is distributed to the staked liquidity providers, boosting is a factor in which LP’s receive different portions of the incentives.
i.e. the pie is the same size but the slices are cut differently
The liquidity in terms of how much veBAL correlates to it what is called a working supply. The working supply can range from 40% to 100% of a user’s staked liquidity position. This is the main theory behind how rewards are distributed. The equation below defines a user’s working supply. (see variable list here)
This would mean the minimum or “non-boosted” supply a user could have is the following, assume no veBAL is owned.
In turn, the maximum working supply possible is defined as the following:
To determine the maximum boost possible for a pool we must compare a user’s non-boosted and maximum working supply to the working supply the pool already has in place.
The pool’s working supply is the sum of all the liquidity providers working supplies prior to the deposit of a new user’s working supply.
The maximum boost possible for a user will be the ratio of their portion of max working supply plus the pools total working supply, divided by their portion of minimum working supply plus the pools total working supply. Please note the pools total working supply used here is prior to the user’s deposit.
Please note if a user has a working supply in a pool already, this must be subtracted total working supply in both the numerator and denominator of the equation a shown below.
