How to evaluate a liquidity pool (TVL, APR, trading volume)

Learn how to evaluate liquidity pools on STON.fi using metrics like APR, TVL, and trading volume. Understand how these factors impact potential token efficiency and pool performance.

Let's head over to the 'Pools' tab STON.fi and explore all the available liquidity pools and their metrics. Please note: with the emergence of new tokens and changes in the market situation, the list of pools and their metrics can change significantly — what you see in the screenshot is likely different from what you see in the application.

APR, Annual Percentage Rate: This is the annual yield of the pool, expressed as a percentage. It is calculated based on data from the last 24 hours. If the transaction volume and the amount of liquidity in the pool did not change, this is how much liquidity providers would earn in a year. However, the situation changes every day, and the next day this indicator may be different. Past performance does not guarantee future returns.

TVL, Total Value Locked: The total value of tokens locked in the liquidity pool, expressed in dollars. The higher it is, the larger transactions are available in this pair and the lower the risk of experiencing a significant price impact.

Volume, 24h: The trading volume in this pair over the past 24 hours. The higher it is, the more popular this pair is among traders, and therefore, the higher the income for liquidity providers.

My Liquidity: The liquidity provided by you personally, expressed in dollars. We will explain how to provide liquidity by yourself in the next article.