Things to take into account:
- Bridging time to a deep liquid market (mostly this is ethreum mainnet)
- Current overall liquidity on the chain
- Base rate on aave (ethreum mainnet), average between USDC and USDT
- Risk premium of the DeFi Project holding the liquidty
- Speed of the chain (Block-Time)
- Reputation of the chain
- Can the farmed token be sold on-chain?
- Whats it the max size to move APR down 10% (say from 15% to 13.5%), this size is 10% of the TVL!
Real life numbers (2025-04-01)
USDC/USDC pool on Taiko currently pays 14%, while base rate on AAVE today is 3.27 % (USDT) and 2.85 % (USDC) average is 3.06%.
Multiplier: 14 % / 3.06 % = 4.57!
- Risk premium for bridge and bridge speed is above normal. (bridge back is 4h)
- Current overall liquidity on the chain is small/mid size
- Risk premium for curve, close to 0
- Taiko has a block time of 0.5-2 min (slow)
- chain is exotic
- reputation is good
- Can the farmed token be sold on-chain? Not good, liquidity of $TAIKO on chain is low.
- Max size to bring down TVL 10% 119K!
