Additional Details

Blend Point Efficiency Backtesting

NOTE: All point efficiency figures are pre-multiplier from BLUR leaderboard positions. Point efficiency only takes into account points earned on Blend.

How are comparison metrics calculated?

In order to compare point farming strategy efficiencies across wallets, SPICE uses the following metrics:

  • Efficiency - pre-leaderboard multiplier points earned per ETH per 24-hours

  • Avg. Multiplier - a time-weighted 24-hour average leaderboard multiplier

  • Lending Pts. Earned - efficiency * avg multiplier * TVL

  • TVL - a 24-hour average of a user's total ETH, NFT portfolio, and loan portfolio in ETH terms

Note: Figures are exclusive of the SP-BLUR vault's performance fees.

How much is a BLUR Point worth?

Based on Season's 2's airdrop and a 3-day post-airdrop VWAP of $0.43 per BLUR token each BLUR point earned was worth ~$2.75.

Many BLUR farmers believe that BLUR points will be worth significantly more in Season 3 due to the following value drivers:

  • The Season 3 airdrop will be financed by BLAST. This means that the Season 3 BLUR airdrop will likely be paid out in BLAST tokens.

  • Community members believe the most challenging method of farming BLUR tokens is through liquidity provision. This means that the BLAST airdrop will be most lucrative on a per point basis for BLUR farmers.

    • The other methods to farm the BLAST airdrop is by locking up liquidity in the BLAST bridge, staking $BLUR tokens, or farming BLUR points on BLUR (which is the SP-BLUR vault strategy).

  • BLAST is valued at $9.63 billion FDV based on AEVO's perp market (as of 1:00 UTC December 19th, 2023)

That said, there is a distinct lack of methods to predict the upcoming BLAST airdrop distribution. As such, an assumption we are moving forward with is to use the conservative estimate of $6.16 per BLUR point, although estimates reach as high as ~$29.39 per BLUR point. Please see the methodology used to arrive at these figures in the attached.

How does SPICE know what LTVs not to lend at?

Collection LTVs are determined based on models described in Loan Selection with an expected probability of default less than 0.1%. This results in a highly risk averse but yield efficient strategy.

Can I withdraw before the season ends?

Users can withdraw their ETH early, without forfeiting any BLUR points earned. Any ETH yield earned can also be withdrawn early.

Once a user has withdrawn their entire ETH position, they will no longer earn any more SP-BLUR points. They can however, lose SP-BLUR points if a penalty is applied to the SP-BLUR vault for liquidating loans. This is highly unlikely as BLUR point penalties are incredibly costly and accounted for in the strategy.

How are loans liquidations handled?

See the P2P Loans portion of Liquidations.

How can some loans be above 1000% APY despite BLUR only allowing "1000% APY" loans?

BLUR calculates loan growth using the following formula:

dcurrent(t)=dstaleet(rbips10000)d_{current}\left(t\right)=d_{stale}e^{t\left(\frac{r_{bips}}{10000}\right)}

rbipsr_{bips} is not equivalent to APY and gets converted accordingly using the following formula on SPICE's UI.

e(rbips/10000)āˆ’1e^{(r_{bips}/10000)}-1

These formulas are taken from CalculationHelpers.sol in the Blur Blend smart contract code and the following visualizer.

What are the fees?

Fees are currently set to a 0% management (principal) fee, 30% performance fee on points earned, 0% performance fee on ETH yield earned. The Prologue vault gets a discounted 15% performance fee on points earned.

What are the risks I should be made aware of?

  • BLUR has yet to allow for public integration with APIs. This means much of the lending functions are built using an off-chain frontend integration. BLUR has communicated public access APIs by the end of Season 3, at which point the SP-BLUR integration will be updated accordingly.

  • Despite SPICE's track record of long-term profitable strategies, yield and BLUR points earned are not risk-free.

  • BLUR has not integrated non-EOA wallets yet. There exists a temporary centralization vector in the SP-BLUR vault used for lending. BLUR team AMAs have indicated a future where non-EOA wallets may be integrated, however, for the time being they are not.

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