Calculating APY

Summary

• See https://meth.mantle.xyz/stats/apy.

• The APY displayed on the MantleLSP (landing page, and staking page): is a 5-day average, is net of Protocol Fees, and assumes compounding.

Details

Reference Rate

The APY is calculated based on the growth of the Primary Market Reference Rate, as defined by:

$${Reference Rate} = \frac{\text{staking.totalcontrolledETH}}{\text{meth.totalSupply}}$$

See: staking.totalcontrolledETH, and meth.totalSupply.

Compounding

The displayed APY assumes compounding, considering Mantle LSP's reallocation of ETH rewards into new staking slots. The Stats page APY is calculated as follows:

$$5d APY = \left( \frac{\text{{ReferenceRate}}(Day5)}{\text{{ReferenceRate}}(Day0)} \right)^{\frac{365}{5}} - 1$$

$$1d APY = \left( \frac{\text{{ReferenceRate}}(Day1)}{\text{{ReferenceRate}}(Day0)} \right)^{{365}} - 1$$

Applicability

The displayed APY is accurate for long-term mETH holders staking and unstaking directly with Mantle LSP directly. It may not be accurate for: mETH holders trading on exchanges; or those who have not held mETH for the entire APY calculation period (starting and ending blockheight). However, over time, all mETH holders should converge on the average.

Deviations from Industry Rates

Mantle LSP's APY may differ from industry averages (e.g., as seen by https://www.validatorqueue.com/, and https://beaconcha.in/), due to the following factors:

• Different protocol fees (see Calculating Fees).

• Opportunistic Execution Layer rewards (MEV and Priority Fee). See Contract: ExecutionLayerReceiver.

• Mantle LSP utilizes a staking.topUp() mechanism which allows an authorized role to "inject" or "donate" ETH into the protocol - increasing the TotalControlledETH but not increasing the mETHSupply. The net impact of Topups is a boosted reward to existing mETH holders.

• Mantle LSP utilizes a staking.exchangeAdjustmentRate() mechanism to provide a fair rate between existing and new mETH holders, and to guard against Unstake Griefing. This is currently applied as a 4bps adjustment for new stakers. The net result is that if there is a large amount of stakers for a particular period, the APY for existing mETH holders will be higher.

TopUps

Topups are displayed separately as these are extraordinary amounts from periodic growth campaigns, and not regular rewards generated from LSP operations.