Uniswap Reactive Network - APR Calculator

Overview

The Uniswap Reactive Network is a Solidity-based, event-driven system that monitors Uniswap V3 events in real-time and calculates APR (Annual Percentage Rate) for liquidity positions. This implementation demonstrates how to build reactive DeFi applications using smart contracts.

🎯 What This Solves

The traditional approach to calculating Uniswap APR involves:

• ❌ Off-chain polling of contract data
• ❌ Batch processing of historical events
• ❌ Delayed updates due to indexing lag
• ❌ Centralized dependencies on external APIs

The Reactive Network approach provides:

• ✅ Real-time event processing on-chain
• ✅ Immediate APR calculations when events occur
• ✅ Decentralized architecture with no external dependencies
• ✅ Efficient gas usage through event queuing and batching

🏗️ Architecture

Core Components

┌─────────────────┐    ┌──────────────────┐    ┌─────────────────┐
│   Uniswap V3    │    │  Reactive        │    │   External      │
│   Pool Events   │───▶│  Network         │───▶│   Systems       │
│                 │    │  Contract        │    │                 │
└─────────────────┘    └──────────────────┘    └─────────────────┘

Data Flow

1. Event Detection: Uniswap V3 pools emit events (Swap, Collect, etc.)
2. Event Queuing: Events are queued in the reactive network contract
3. Event Processing: Queued events are processed to update metrics
4. APR Calculation: Real-time APR calculations based on updated metrics
5. Event Emission: Results are emitted as events for external consumption

📊 Key Features

1. Real-Time Event Processing

• Monitors Uniswap V3 events (Swap, Collect, Mint, Burn)
• Queues events for efficient processing
• Updates pool metrics immediately

2. Automatic APR Calculation

• Calculates APR for tracked positions
• Updates calculations when pool metrics change
• Maintains historical APR data

3. Efficient Data Management

• Event queuing system to handle high-frequency updates
• Configurable update intervals to prevent spam
• Automatic cleanup of processed events

4. Flexible Configuration

• Configurable fee rates for different pools
• Adjustable update intervals and queue sizes
• Support for multiple pools and positions

🔧 Smart Contract Functions

Core Functions

Function	Description	Access
addPool(address, uint256)	Add a new pool to track	Owner only
addPosition(tokenId, owner, liquidity, tickLower, tickUpper)	Add a new position to track	Owner only
queueEvent(eventHash, poolAddress, eventData)	Queue a new event for processing	Public
processEvents(maxEvents)	Process queued events	Public
calculatePositionAPR(tokenId)	Calculate APR for a position	Public

View Functions

Function	Description	Returns
getPoolMetrics(address)	Get current pool metrics	PoolMetrics struct
getPositionData(tokenId)	Get current position data	PositionData struct
getTrackedPools()	Get all tracked pool addresses	Address array
getTrackedPositions()	Get all tracked position IDs	Uint256 array
getSystemStats()	Get system statistics	Multiple values

🚀 Quick Start

1. Installation

# Clone the repository
git clone <repository-url>
cd phase1CoreLogic/implementation-guide

# Install dependencies
npm install

# Install Hardhat (if not already installed)
npm install --save-dev hardhat

2. Configuration

Create a .env file with your configuration:

# Network Configuration
NETWORK_URL=https://eth-mainnet.alchemyapi.io/v2/YOUR_API_KEY
PRIVATE_KEY=your_private_key_here

# Contract Configuration
PRICE_ORACLE=0x0000000000000000000000000000000000000000
POSITION_MANAGER=0xC36442b4a4522E871399CD717aBDD847Ab11FE88

# System Parameters
MIN_UPDATE_INTERVAL=60
MAX_EVENT_QUEUE_SIZE=1000
APR_CALCULATION_WINDOW=86400

3. Deployment

# Compile contracts
npx hardhat compile

# Deploy to network
npx hardhat run deploy-reactive-network.js --network mainnet

4. Setup

// Add pools to track
await reactiveNetwork.addPool(
  '0x8ad599c3A0ff1De082011EFDDc58f1908eb6e6D8b', // USDC/WETH 0.3%
  3000 // 0.3% fee rate
);

// Add positions to track
await reactiveNetwork.addPosition(
  1, // token ID
  '0xYourAddress', // owner
  ethers.utils.parseEther('1000'), // liquidity
  193000, // tick lower
  195000  // tick upper
);

📈 How APR Calculation Works

Formula

APR = (Annual Fees / Position Value) × 100

Where:
- Annual Fees = Daily Fees × 365
- Daily Fees = (Pool Daily Fees × Position Share)
- Position Share = Position Liquidity / Total Pool Liquidity
- Position Value = Position Liquidity in USD

Implementation

function _calculateAPR(
    PositionData storage position,
    PoolMetrics storage poolMetrics,
    address poolAddress
) internal view returns (uint256 apr) {
    // 1. Calculate position's share of pool
    uint256 positionShare = _calculatePositionShare(position, poolAddress);
    
    // 2. Calculate daily fees for the position
    uint256 dailyFees = poolMetrics.totalFeesUSD
        .mul(positionShare)
        .div(aprCalculationWindow);
    
    // 3. Calculate annual fees
    uint256 annualFees = dailyFees.mul(365);
    
    // 4. Calculate position value in USD
    uint256 positionValue = _calculatePositionValue(position, poolAddress);
    
    // 5. Calculate APR in basis points
    if (positionValue > 0) {
        apr = annualFees.mul(10000).div(positionValue);
    }
    
    return apr;
}

🔄 Event Processing Workflow

1. Event Detection

// Monitor Uniswap V3 events
poolContract.on('Swap', (sender, recipient, amount0, amount1, sqrtPriceX96, liquidity, tick) => {
    // Queue event in reactive network
    await reactiveNetwork.queueEvent(
        ethers.utils.keccak256(ethers.utils.toUtf8Bytes(`${sender}-${Date.now()}`)),
        poolAddress,
        ethers.utils.defaultAbiCoder.encode(
            ['address', 'address', 'int256', 'int256', 'uint160', 'uint128', 'int24'],
            [sender, recipient, amount0, amount1, sqrtPriceX96, liquidity, tick]
        )
    );
});

2. Event Processing

// Process queued events
await reactiveNetwork.processEvents(10); // Process up to 10 events

3. Metrics Update

// Events automatically update pool metrics
function _processSwapEvent(EventData storage eventData) internal {
    address poolAddress = eventData.poolAddress;
    PoolMetrics storage metrics = poolMetrics[poolAddress];
    
    // Update volume, fees, and TVL based on event data
    // ... calculation logic ...
    
    emit PoolMetricsUpdated(poolAddress, volume, fees, tvl, timestamp);
}

4. APR Recalculation

// APR is automatically recalculated when metrics change
const apr = await reactiveNetwork.calculatePositionAPR(tokenId);
console.log(`New APR: ${apr / 100}%`);

🧪 Testing

Local Testing

# Start local Hardhat network
npx hardhat node

# Deploy to local network
npx hardhat run deploy-reactive-network.js --network localhost

# Run tests
npx hardhat test

Test Scenarios

1. Event Queuing Test

   • Queue multiple events
   • Verify queue size limits
   • Test event processing

2. APR Calculation Test

   • Add test pools and positions
   • Simulate trading activity
   • Verify APR calculations

3. Performance Test

   • Test with high event frequency
   • Verify gas efficiency
   • Test queue cleanup

🔒 Security Features

Access Control

• Owner-only functions for critical operations
• Pool validation before event processing
• Position verification before APR calculation

Reentrancy Protection

• ReentrancyGuard modifier on all external functions
• Safe math operations using OpenZeppelin libraries

Input Validation

• Address validation for pool and position addresses
• Parameter bounds checking for configuration values
• Event data validation before processing

📊 Monitoring and Analytics

System Metrics

const stats = await reactiveNetwork.getSystemStats();
console.log(`Total Events Processed: ${stats._totalEventsProcessed}`);
console.log(`Total APR Calculations: ${stats._totalAPRCalculations}`);
console.log(`Tracked Pools: ${stats._trackedPoolsCount}`);
console.log(`Tracked Positions: ${stats._trackedPositionsCount}`);

Pool Metrics

const metrics = await reactiveNetwork.getPoolMetrics(poolAddress);
console.log(`Volume: $${ethers.utils.formatEther(metrics.totalVolumeUSD)}`);
console.log(`Fees: $${ethers.utils.formatEther(metrics.totalFeesUSD)}`);
console.log(`TVL: $${ethers.utils.formatEther(metrics.totalValueLockedUSD)}`);

Position Analytics

const position = await reactiveNetwork.getPositionData(tokenId);
console.log(`Liquidity: ${ethers.utils.formatEther(position.liquidity)}`);
console.log(`APR: ${position.lastAPR / 100}%`);
console.log(`Last Update: ${new Date(position.lastUpdateTimestamp * 1000)}`);

🚀 Production Deployment

1. Network Selection

• Mainnet: For production use
• Testnet: For testing and validation
• Private Network: For enterprise deployments

2. Configuration Optimization

// Production settings
MIN_UPDATE_INTERVAL = 300;        // 5 minutes
MAX_EVENT_QUEUE_SIZE = 5000;      // 5000 events
APR_CALCULATION_WINDOW = 86400;   // 24 hours

3. Gas Optimization

• Use batch processing for multiple events
• Implement event filtering to reduce unnecessary processing
• Consider using Layer 2 solutions for high-frequency events

4. Monitoring Setup

• Set up event monitoring for contract events
• Implement alerting for system metrics
• Monitor gas usage and optimize accordingly

🔮 Future Enhancements

1. Advanced APR Models

• Impermanent loss calculation
• Fee compounding effects
• Risk-adjusted returns

2. Multi-Chain Support

• Polygon, Arbitrum, Optimism
• Cross-chain position tracking
• Unified APR calculations

3. Machine Learning Integration

• Predictive APR modeling
• Risk assessment algorithms
• Automated position optimization

4. DeFi Protocol Integration

• Curve, Balancer, SushiSwap
• Cross-protocol APR comparison
• Portfolio optimization

📚 Resources

Documentation

• Uniswap V3 Documentation
• OpenZeppelin Contracts
• Hardhat Documentation

Related Projects

• The Graph Protocol - Alternative indexing solution
• Chainlink Price Feeds - Price oracle integration
• Ethereum Events - Event system documentation

🤝 Contributing

Development Setup

1. Fork the repository
2. Create a feature branch
3. Make your changes
4. Add tests for new functionality
5. Submit a pull request

Code Standards

• Follow Solidity style guide
• Add comprehensive documentation
• Include unit tests for all functions
• Ensure gas optimization

📄 License

This project is licensed under the MIT License - see the LICENSE file for details.

🆘 Support

Issues

• Report bugs via GitHub Issues
• Include detailed reproduction steps
• Provide network and contract addresses

Questions

• Check existing issues and discussions
• Create new issue for questions
• Tag with appropriate labels

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Built with ❤️ for the DeFi community

This implementation demonstrates how to build reactive, event-driven DeFi applications using Solidity smart contracts. Use it as a foundation for your own DeFi projects!