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reflect reducing maximum inflation on reward curve
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@F-OBrien
F-OBrien committed Jan 29, 2024
1 parent 411643a commit e74d7cc
Showing 1 changed file with 63 additions and 36 deletions.
99 changes: 63 additions & 36 deletions components/charts/overviewCharts/RewardCurve.tsx
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Original file line number Diff line number Diff line change
Expand Up @@ -15,7 +15,6 @@ import {
} from 'chart.js';
import { Chart } from 'react-chartjs-2';
import Spinner, { MiniSpinner } from '../../Spinner';
import { inflationCurve, rewardCurve, apyRewardCurve } from '../../../constants/rewardCurve';
import { useSdk } from '../../../hooks/useSdk';
import { useEraTotalStaked } from '../../../hooks/StakingQueries';
import annotationPlugin from 'chartjs-plugin-annotation';
Expand All @@ -24,6 +23,46 @@ import { VoidFn } from '@polkadot/api/types';

ChartJS.register(CategoryScale, LinearScale, PointElement, LineElement, Title, Tooltip, Legend, annotationPlugin, ScatterController);

interface StakingMetrics {
apr: number;
inflation: number;
apy: number;
}
// helper function to calculate rewards
const calculateInflationAndRates = (percentStaked: number, totalIssuance: number, fixedYearlyReward: Balance): StakingMetrics => {
// Inflation and reward data based on formula:
// Inflation(x) = I0 + (I_ideal - I0) * x / x_ideal for 0 < x <= x_ideal
// = I0 + (I_ideal - I0) * 2 ^((x_ideal-x)/d) for x_ideal < x <= 1
// Where:
// x = ratio of staked tokens to token supply,
// Inflation(x) = Annual inflation rate at staking ratio x,
// I0 = limit of inflation at x=0 = 0.025 = 2.5%,
// x_ideal = position of "ideal" staking ratio = 0.7 = 70%,
// I_ideal = ideal inflation at x_ideal = 0.14 = 14% (maximum inflation),
// d = decay rate for staking ratio > x_ideal = 0.05 = 5%,
//
// Reward(x) = Inflation(x) / x
// Where:
// Reward(x) = Annual reward rate at staking ratio x
const xIdeal = 70; // Ideal Staked Percent of total supply.
const iIdeal = 14; // Inflation at ideal staked percent.
const iZero = 2.5; // Inflation at staked percent = 0%.
const decay = 5; // decay for staked percent greater than the ideal

const calculatedInflation =
percentStaked <= xIdeal
? iZero + (iIdeal - iZero) * (percentStaked / xIdeal)
: iZero + (iIdeal - iZero) * 2 ** ((xIdeal - percentStaked) / decay);

const maxInflation = (100 * fixedYearlyReward.toNumber()) / totalIssuance; // Use 1 as fallback to avoid division by zero
const inflation = Math.min(calculatedInflation, maxInflation);

const apr = 100 * (inflation / percentStaked);
const apy = 100 * ((1 + inflation / percentStaked / 365) ** 365 - 1);

return { apr, inflation, apy };
};

const RewardCurve = () => {
// Define reference for tracking mounted state
const mountedRef = useRef(false);
Expand Down Expand Up @@ -78,47 +117,35 @@ const RewardCurve = () => {

// Calculate percent of total staked, APR, APY and annual inflation.
const { percentTotalStaked, apr, inflation, apy } = useMemo(() => {
if (!totalIssuance || !activeEraTotalStaked.data) return {};

// Inflation and reward data based on formula:
// Inflation(x) = I0 + (I_ideal - I0) * x / x_ideal for 0 < x <= x_ideal
// = I0 + (I_ideal - I0) * 2 ^((x_ideal-x)/d) for x_ideal < x <= 1
// Where:
// x = ratio of staked tokens to token supply,
// Inflation(x) = Annual inflation rate at staking ratio x,
// I0 = limit of inflation at x=0 = 0.025 = 2.5%,
// x_ideal = position of "ideal" staking ratio = 0.7 = 70%,
// I_ideal = ideal inflation at x_ideal = 0.14 = 14% (maximum inflation),
// d = decay rate for staking ratio > x_ideal = 0.05 = 5%,
//
// Reward(x) = Inflation(x) / x
// Where:
// Reward(x) = Annual reward rate at staking ratio x

const xIdeal = 70; // Ideal Staked Percent of total supply.
const iIdeal = 14; // Inflation at ideal staked percent.
const iZero = 2.5; // Inflation at staked percent = 0%.
const decay = 5; // decay for staked percent greater than the ideal
if (!totalIssuance || !activeEraTotalStaked.data || !fixedYearlyReward) return {};

const percentTotalStaked = (100 * activeEraTotalStaked.data.toNumber()) / totalIssuance?.toNumber();

let calculatedInflation;

if (percentTotalStaked <= xIdeal) {
calculatedInflation = iZero + (iIdeal - iZero) * (percentTotalStaked / xIdeal);
} else {
calculatedInflation = iZero + (iIdeal - iZero) * 2 ** ((xIdeal - percentTotalStaked) / decay);
}
const maxInflation = (100 * fixedYearlyReward.toNumber()) / totalIssuance?.toNumber();
console.log(calculatedInflation, maxInflation);

const inflation = Math.min(calculatedInflation, maxInflation);
const apr = 100 * (inflation / percentTotalStaked);
const apy = 100 * ((1 + inflation / percentTotalStaked / 365) ** 365 - 1);
const { apy, apr, inflation } = calculateInflationAndRates(percentTotalStaked, totalIssuance.toNumber(), fixedYearlyReward);

return { percentTotalStaked, apr, inflation, apy };
}, [activeEraTotalStaked.data, fixedYearlyReward, totalIssuance]);

// Generate curves
const { inflationCurve, rewardCurve, apyRewardCurve } = useMemo(() => {
if (!totalIssuance || !fixedYearlyReward) return {};

const inflationCurve: { x: number; y: number }[] = [];
const rewardCurve: { x: number; y: number }[] = [];
const apyRewardCurve: { x: number; y: number }[] = [];

const stepSize = 0.1;

for (let percentStaked = 0; percentStaked <= 100; percentStaked += stepSize) {
const { inflation, apr, apy } = calculateInflationAndRates(percentStaked, totalIssuance.toNumber(), fixedYearlyReward);
inflationCurve.push({ x: percentStaked, y: inflation });
rewardCurve.push({ x: percentStaked, y: apr });
apyRewardCurve.push({ x: percentStaked, y: apy });
}

return { inflationCurve, rewardCurve, apyRewardCurve };
}, [fixedYearlyReward, totalIssuance]);

// Set the chart options including annotation.
const chartOptions = useMemo(() => {
if (!apr || !inflation || !percentTotalStaked || !activeEraTotalStaked.data || !totalIssuance) return;
Expand Down Expand Up @@ -320,7 +347,7 @@ const RewardCurve = () => {
setChartData(rewardCurveChartData);
}
return;
}, [activeEraTotalStaked.data, apr, inflation, totalIssuance]);
}, [activeEraTotalStaked.data, apr, apyRewardCurve, inflation, inflationCurve, rewardCurve, totalIssuance]);

return (
<div className='LineChart'>
Expand Down

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