By depositing tokens to the 1inch Liquidity protocol, users can earn fees which accrue over time. A small fee is captured whenever a swap occurs through the pool.
*** If there is volatility between the pair after depositing tokens, then impermanent loss can occur, possibly negating any earned fees.
How to calculate liquidity rewards/losses
To calculate rewards for providing liquidity, simply subtract the total original amount provided from the "My liquidity" amount. If the total is a positive number, then that is the reward amount. If it is negative, then impermanent loss has occurred.
In this example below, we will calculate the rewards from a 1inch-USDC pool.
"My Liquidity"
This can be found by searching for the desired pool on app.1inch.io (under the tab: DAO->Pools), and looking under the "My Liquidity" column.
Original amount provided
This amount can be found on the blockchain explorer, or within your connected wallet application.
Please note: BSCscan.com only shows current token rates, so if using that block explorer, you will need to calculate the rate of 1INCH tokens at the time of deposit. (Etherscan provides a feature to show the rate at time of transaction confirmation)
Since USDC is used in this example, and its rate remains constant, we can simply use that same amount for the 1INCH token value (as equal amounts are deposited to the pool at the time of confirmation):
Total "My liquidity"
$2,440 USD
Original amount provided:
$1,182 worth of USDC
$1,182 worth of 1INCH
Total: $2,364 USD
My liquidity: $2,440 USD
-Total provided: $2,364 USD
Total rewards (to date): $76 USD
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