How does profit tracking work?

Written by Nikola J.
Updated 2 months ago

ETH Saver estimates the profit of a position by tracking the amounts of ETH deposited (supplied/paid back) and extracted (withdrawn/borrowed) from the position, taking the position balance (net worth) into account.

Why is the profit negative when opening a position?
For positions based on rETH or cbETH, turning ETH into rETH/cbETH cannot be done by staking it directly at a fixed rate (like you can with wstETH). This means that the swap is done via decentralised, onchain exchanges. The market price can be slightly below the actual rate claimed by rETH/cbETH contracts, which is what ETH Saver uses to track profit. The swap price, including the estimated trade size impact, will be visible on the UI whenever a recipe includes a swap on the market. Note that ETH Saver takes no fees from any swap. Learn more about fees.

Positions based on wstETH can have a slightly negative profit when creating a position because of the limited calculation precision on the side of smart contracts. This imprecision is  very small and doesn't affect the profit in a meaningful way in the long run. 

Why is my profit decreasing?
When leveraging ETH, you have a certain amount of collateral in the chosen staked ETH token creating a positive yield, and an amount of debt in ETH creating a negative yield (dictated by the used protocol's borrow rate). The borrow rate is applied continuously over time while staking yield is usually applied daily. This results in the position profit having a big jump every 24 hours, and decreasing slowly between the jumps. The average of these changes over a longer time period is the Estimated Net APY shown in the interface.

How does ETH price fluctuation affect profit?
Profit is tracked and denominated primarily in ETH. As such, ETH Saver does not take market price fluctuation into account. Profit in USD is equal to the market value of profit in ETH at that time. 

How do trade size impact and slippage affect profit?
ETH Saver aims to be as fair as possible in all situations. When executing actions that include a swap (such as leverage actions - Boost or Repay), profit tracking tracks an amount estimated using the rate from the staked ETH token contract instead of the actual received amount. What this means is that any loss caused by trade size impact or slippage is taken into account and counted as a loss. This is done so that the performance fee would only be taken when the position actually created positive profit for the owner. 

Does the profit estimate in the UI include the performance fee?
Yes. The performance fee is already subtracted from the profit estimate shown in the interface, even though the actual fee is taken only when actually exiting the position. 

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