Murabaha Fee Rate and Protocol Fees are fixed at the time of execution for the duration of a Murabaha but fluctuate according to pool and market dynamics outside of execution. The pool’s vROI (variable return on investment) is calculated by taking the difference in the PPS over some interval (A – B) as follows:
Where, AB interval Coefficient = 86,400 / seconds between A – B
The pool vROI will be calculated over varying periods (hourly, daily, monthly, yearly) and displayed graphically in the analytics section. The Markets section of the AZKA UI displays the daily vROI for each pool to give a better indication of current pool dynamics, whereas the yearly vROI displayed in the analytics section gives a better representation of pool dynamics over time. The yearly vROI is essentially the 'Profit Rate' LP's can expect to receive.
What is 'Real Yield'
Unlike other Shariah Compliant yield generating products, AZKA pools derive their profit not from inflationary token rewards typically given as incentives in AMM's or Bridge Protocols. Relying solely on such token incentives for yield has its limitations. Often termed as 'ponzi' yield by many, this approach is criticised for its unsustainable and unscalable structure, lacking a foundation in genuine economic activity. With regards to scalability, such protocols have a yield that is a function of some predetermined inflationary token emission schedule and TVL. If token emissions do not increase with TVL, The yield is essentially capped by the amount of token emissions that can be issued. The yield generated from AZKA pools on the other hand is capped by the demand for Murabaha (unlimited) rather than some fixed parameter. Essentially creating a more scalable yield source backed by real underlying economic activity.