Understanding Swap Likelihood

Key Takeaways

• Swap Likelihood is a visual guide, not a guarantee.

• Swap Likelihood updates with market conditions (price, volatility, time).

• Use it alongside your own research and strategy.

The fuller the bar, the higher the probability of a swap — but outcomes may change as markets move.

Overview

On Prodigy.Fi, Swap Likelihood is a simple indicator designed to help you understand how likely your vault subscription will swap from one asset to another when it reaches expiry.

Instead of showing you complex formulas or trading jargon, Swap Likelihood is displayed as a progress bar on the interface. The fuller the bar, the higher the chance of a swap happening at expiry.

The bar uses a color gradient for clarity:

• Left side (green): unlikely to swap

• Right side (blue): likely to swap

Think of it like a game progress bar; as the bar fills from green toward blue, the likelihood of a swap increases.

How Swap Likelihood Works

Swap Likelihood is calculated by a model that takes into account three main factors:

1. Current Price Vs Linked Price

Direction: The closer the current market price is to the linked price, the higher the likelihood of a swap. If the market price goes above (for Sell High) or below (for Buy Low) the linked price, the bar can reach maximum likelihood.

Example:

• Linked price = $100

• Current price = $98 or $102 → high likelihood

• Current price = $80 → low likelihood

2. Yield

• Direction: Higher yields usually indicate a higher swap likelihood. Lower yields suggest lower likelihood.

• Why: Vault Creators set yields to balance risk and reward. A higher swap chance typically requires a higher yield to attract Vault Subscribers.

3. Time to Expiry

Direction: The less time left, the more weight current price and volatility carry.

Examples:

• 2 hours left & price near linked price → likelihood surges.

• 48 hours left → more uncertainty, likelihood bar more moderate.

Sell-High vs Buy Low Vaults

• In a Sell High vault, rising prices increase the chance of a swap.

• In a Buy Low vault, falling prices increase the chance of a swap. Always check your vault type before interpreting the Swap Likelihood bar.

Disclaimer: The Swap Likelihood indicator is a model-based visualization provided for educational purposes. It does not guarantee or predict actual results. Market conditions can change rapidly. Before participating in any vaults, please conduct your own research, understand the risks involved, consider your financial situation carefully. Past performance, yields, and swap likelihood indicators are not indicative of future outcomes.