The start date is limited by the earliest data available time of the pool. There are 2 possibilities: the pool is not yet created at the chosen time, or our TimeCrawler did not reach there yet…
High annualized rates are frequently found in Time Machine, especially for the first 24 hours data in the listing page and simulation chart for price effect AROI. This is simply due to the small denominator when calculating the annualized value. A small change in price of underlying crypto assets already results in a large annual rate, as the daily changes will be multiplied by 365, and hourly changes will be multiplied by an even higher factor – 8760.
So, why are we still showing the annualized rates for 24 hours? This is to allow users to have a fair comparison for the return of liquidity pairs across different time frames. Besides, the highly fluctuated 24-hr return rate also tells you the importance of farming pairs with stable yield!
There are 3 possible reasons for this.
- 1.Large tokens price percentage change during the period For example, consider a Token A/Token B liquidity pool of 50/50 split: at T0, Token A: $0.1 Token B: $1 With principal $100, we have 500 Token A and 50 Token B. k = 500 * 50 = 25,000 at T1, Token A: $0.2 Token B: $1.1 By constant k formula, we will now have 370.81 and 67.42 Token B. (370.81 * 67.42 = 25,000) Total equity value in liquidity pool = $148.32 You can see, increase in both tokens’ price by $0.1 already results in 48.3% increase of equity value.
- 2.Assumption 2 is violated Recall Assumption 2: Crypto assets that you added to the pool will not affect the pool's original value, as you are acting as an "observer" only However, if the assumed investment amount is large compared to the pool size at desired start time, this assumption will no longer be true. Other figures relying on this assumption will also be affected.
- 3.Some data are missed in the considered timeframe
Recall the formula of Harvest Healthiness Ratio (HHR):