Price calculation for WBTC/USDC pair using current tick

[yathindrak]

I'm having trouble with price calculations for the WBTC/USDC pair and hoping someone can help clarify where I'm going wrong.

Pool details:

Contract: 0x99ac8cA7087fA4A2A1FB6357269965A2014ABc35 (WBTC/USDC)
Current tick: 70538 (Got from etherscan using contract's slot0 struct)

Calculation:

P = 1.0001 ** tick
P = 1.0001 ** 70538

Considering decimal adjustment:
P = y / x = 1e6 / 1e8 = 1e-2

Final price = (1.0001 ** 70538) * 1e-2 = 11.5683 (which seems way off for WBTC price)

But if use P = x / y for decimal adjustment, i'm getting the correct value.

I'm quite confused why the same approach haven't really worked out.

Any insights would be greatly appreciated. @EngrPips @t4sk

[EngrPips]

If you have a pair like this WBTC/USDC , then token y will be WBTC and token x will be USDC, and if that is the case, the calculation should go as shown below

p = y / x  = 1e8 / 1e6 = 1e2 [because `WBTC` has 8 decimal and `USDC` has 6 decimal

finalPrice = (1.0001 ** 70538) * 1e2 = 115,683 (which makes sense as the current price of BTC)

In conclusion, your mistake was in misplacing the decimals.

[yathindrak]

mmm didnt really get how the WBTC is the token y. Since if we consider the hexadecimal values WBTC would be the lesser value, isnt it?

Great if you could clarify.

[EngrPips]

I am sorry if the answer above was confusing. You are correct that WBTC will be token x in the pool, considering it has a lesser hexadecimal value. So the price is USDC/WBTC [This simply means that by default, the pool will return the price of WBTC in terms of USDC]

P = 1.0001 ** 70538
P = 1156.8989

To account for the decimal of the price so that the price reflects the actual price, we would need to do the decimal ratio calculation, but we won't say simply because the pool has its token in this form USDC/WBTC, then our ratio calculation will be 10**6/10**8 but instead we want to calculate the price of WBTC in term of USDC so we will divide the P above by the decimal of USDC and then multiply by the decimal of WBTC

Pdecimal = (1156.8989/ 10**6) * 10**8
Pdecimal = 115,683

[yathindrak]

Thank you so much. Got it now. I think we can simply think decimal factor = x / y isn't it (when P is price x in terms of y)?

[EngrPips]

Any time, Friend. Yeah, that model seems correct.