Why Does APR Change in Liquidity Pools

APR (Annual Percentage Rate) in liquidity pools is dynamic and can change based on several factors. It is calculated by dividing the total rewards allocated for a specific vault timeframe (usually one month) by the total value locked (TVL) in that vault.

When you — or other liquidity providers — add liquidity to a vault, the TVL increases. Since the same reward pool is now distributed across a larger amount of capital, the APR decreases. This dilution effect is especially noticeable in new or low-liquidity pools, where even small additions of capital can significantly impact APR.

At Stabull, our team actively monitors APRs across all vaults and supported assets on every chain. When necessary, we adjust the number of reward tokens to help maintain a minimum target APR, ensuring the incentives remain attractive for liquidity providers, as well as competitive with other DEX’s providing similar pools.