I’m trying to understand the economics of liquidity pools, and where the high APRs come from.
For example, I am providing liquidity to a MATIC-QUICK pool on Quickswap. For being in the pool, I earn transaction fees, but also may lose money in impermanent loss.
However, I then can put my MATIC-QUICK LP tokens in vault on Polycat, and that earns an additional 0.09% daily APR. [Nacho]( breaks down this 0.09% APR as coming from LP fees and and from the Pool.
What is the value of my LP tokens to Nacho? Are there additional LP fees that Polycat can earn on my LP tokens, beyond what I am paid via just participating in the pool on quickswap?
Any documentation folks could point me to would be greatly appreciated!