High-Precision Fixed-Point 128 Bit Math

Dealing with decimals is a notorious issue for most developers on other chains, especially when working with DeFi. Blockchains are deterministic systems and floating-point arithmetic is non-deterministic across different compilers and architectures, this is why blockchains use fixed-point arithmetic via integers (scaling numbers by a fixed factor). The issue with this is that these fixed-point integers tend to be very imprecise when using various mathematical operations on them. The more operations you apply to these numbers, the more imprecise these numbers become. However DeFiActionsMathUtils provides a standardized library for high-precision mathematical operations in DeFi applications on Flow. The contract extends Cadence's native 8-decimal precision (UFix64) to 24 decimals using UInt128 for intermediate calculations, ensuring accuracy in complex financial computations while maintaining deterministic results across the network.

Through integration of this math utility library, developers can ensure that their DeFi protocols perform precise calculations for liquidity pools, yield farming, token swaps, and other financial operations without accumulating rounding errors.

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While this documentation focuses on DeFi use cases, these mathematical utilities can be used for any application requiring high-precision decimal arithmetic beyond the native 8-decimal limitation of UFix64.

The Precision Problem

DeFi applications often require multiple sequential calculations, and each operation can introduce rounding errors. When these errors compound over multiple operations, they can lead to:

• Price manipulation vulnerabilities
• Incorrect liquidity calculations
• Unfair token distributions
• Arbitrage opportunities from precision loss

Consider a simple example:

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// Native UFix64 with 8 decimals

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let price: UFix64 = 1.23456789 // Actually stored as 1.23456789

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let amount: UFix64 = 1000000.0

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let fee: UFix64 = 0.003 // 0.3%

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// Multiple operations compound rounding errors

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let afterFee = amount * (1.0 - fee) // Some precision lost

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let output = afterFee * price // More precision lost

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let finalAmount = output / someRatio // Even more precision lost

After 3-4 sequential operations, the cumulative rounding error can be significant, especially when dealing with large amounts. Assuming a rounding error with 8 decimals (1.234567885 rounds up to 1.23456789, causing a rounding error of 0.000000005), then after 100 operations with this error and dealing with 1 million dollars USDF, the protocol is losing $0.5 in revenue from this lack of precision. This might not seem like a lot, but if we consider the TVL of Aave, which is around 40 billion USD, then that loss results in $20,000 USD!

The Solution: 24-Decimal Precision

DeFiActionsMathUtils solves this by using UInt128 to represent fixed-point numbers with 24 decimal places (scaling factor of 10^24). This provides 16 additional decimal places for intermediate calculations, dramatically reducing precision loss.

Note: There is still some precision loss occurring, but it is orders of magnitud smaller than with 8 decimals.

The Three-Tier Precision System

The contract implements a precision sandwich pattern:

1. Input Layer: UFix64 (8 decimals) - User-facing values
2. Processing Layer: UInt128 (24 decimals) - Internal calculations
3. Output Layer: UFix64 (8 decimals) - Final results with smart rounding

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// Import the contract

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import DeFiActionsMathUtils from 'ContractAddress'

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// Convert UFix64 to high-precision UInt128

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let inputAmount: UFix64 = 1000.12345678

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let highPrecision = DeFiActionsMathUtils.toUInt128(inputAmount)

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// highPrecision now represents 1000.123456780000000000000000 (24 decimals)

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// Perform calculations at 24-decimal precision

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let result = DeFiActionsMathUtils.mul(highPrecision, anotherValue)

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// Convert back to UFix64 with rounding

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let output = DeFiActionsMathUtils.toUFix64Round(result)

Core Constants

The contract defines several key constants:

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access(all) let e24: UInt128 // 10^24 = 1,000,000,000,000,000,000,000,000

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access(all) let e8: UInt128 // 10^8 = 100,000,000

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access(all) let decimals: UInt8 // 24

These constants ensure consistent scaling across all operations.

Rounding Modes

Smart rounding is the strategic selection of rounding strategies based on the financial context of your calculation. After performing high-precision calculations at 24 decimals, the final results must be converted back to UFix64 (8 decimals), and how you handle this conversion can protect your protocol from losses, ensure fairness to users, and reduce systematic bias.

DeFiActionsMathUtils provides four rounding modes, each optimized for specific financial scenarios:

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access(all) enum RoundingMode: UInt8 {

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/// Rounds down (floor) - use for payouts

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access(all) case RoundDown

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/// Rounds up (ceiling) - use for fees/liabilities

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access(all) case RoundUp

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/// Standard rounding: < 0.5 down, >= 0.5 up

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access(all) case RoundHalfUp

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/// Banker's rounding: ties round to even number

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access(all) case RoundEven

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}

When to Use Each Mode

RoundDown - Choose this when calculating user payouts, withdrawals, or rewards. By rounding down, your protocol retains any fractional amounts, protecting against losses from accumulated rounding errors. This is the conservative choice when funds leave your protocol.

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// When calculating how much to pay out to users

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let userReward = DeFiActionsMathUtils.toUFix64RoundDown(calculatedReward)

RoundUp - Use this for protocol fees, transaction costs, or amounts owed to your protocol. Rounding up ensures your protocol collects slightly more, compensating for precision loss and preventing systematic under-collection of fees over many transactions.

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// When calculating fees the protocol collects

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let protocolFee = DeFiActionsMathUtils.toUFix64RoundUp(calculatedFee)

RoundHalfUp - Apply this for general-purpose calculations, display values, or when presenting prices to users. This is the familiar rounding method (values 0.5 and above round up, below 0.5 round down) that users expect in traditional finance.

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// For display values or general calculations

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let displayValue = DeFiActionsMathUtils.toUFix64Round(calculatedValue)

RoundEven - Select this for scenarios involving many repeated calculations where you want to minimize systematic bias. Also known as "banker's rounding", this mode rounds ties (exactly 0.5) to the nearest even number, which statistically balances out over many operations, making it ideal for large-scale distributions or statistical calculations.

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// For repeated operations where bias matters

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let unbiasedValue = DeFiActionsMathUtils.toUFix64(calculatedValue, DeFiActionsMathUtils.RoundingMode.RoundEven)

Core Functions

Conversion Functions

Converting UFix64 to UInt128

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access(all) view fun toUInt128(_ value: UFix64): UInt128

Converts a UFix64 value to UInt128 with 24-decimal precision.

Example:

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import DeFiActionsMathUtils from 'ContractAddress'

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let price: UFix64 = 123.45678900

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let highPrecisionPrice = DeFiActionsMathUtils.toUInt128(price)

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// highPrecisionPrice = 123456789000000000000000000 (represents 123.45678900... with 24 decimals)

Converting UInt128 to UFix64

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access(all) view fun toUFix64(_ value: UInt128, _ roundingMode: RoundingMode): UFix64

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access(all) view fun toUFix64Round(_ value: UInt128): UFix64

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access(all) view fun toUFix64RoundDown(_ value: UInt128): UFix64

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access(all) view fun toUFix64RoundUp(_ value: UInt128): UFix64

Converts a UInt128 value back to UFix64, applying the specified rounding strategy.

Example:

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let highPrecisionValue: UInt128 = 1234567890123456789012345678

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let roundedValue = DeFiActionsMathUtils.toUFix64Round(highPrecisionValue)

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// roundedValue = 1234567.89012346 (rounded to 8 decimals using RoundHalfUp)

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let flooredValue = DeFiActionsMathUtils.toUFix64RoundDown(highPrecisionValue)

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// flooredValue = 1234567.89012345 (truncated to 8 decimals)

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let ceilingValue = DeFiActionsMathUtils.toUFix64RoundUp(highPrecisionValue)

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// ceilingValue = 1234567.89012346 (rounded up to 8 decimals)

High-Precision Arithmetic

Multiplication

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access(all) view fun mul(_ x: UInt128, _ y: UInt128): UInt128

Multiplies two 24-decimal fixed-point numbers, maintaining precision.

Example:

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let amount = DeFiActionsMathUtils.toUInt128(1000.0)

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let price = DeFiActionsMathUtils.toUInt128(1.5)

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let totalValue = DeFiActionsMathUtils.mul(amount, price)

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let result = DeFiActionsMathUtils.toUFix64Round(totalValue)

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// result = 1500.0

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Important: The multiplication uses UInt256 internally to prevent overflow:

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// Internal implementation prevents overflow

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return UInt128(UInt256(x) * UInt256(y) / UInt256(e24))

Division

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access(all) view fun div(_ x: UInt128, _ y: UInt128): UInt128

Divides two 24-decimal fixed-point numbers, maintaining precision.

Example:

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let totalValue = DeFiActionsMathUtils.toUInt128(1500.0)

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let shares = DeFiActionsMathUtils.toUInt128(3.0)

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let pricePerShare = DeFiActionsMathUtils.div(totalValue, shares)

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let result = DeFiActionsMathUtils.toUFix64Round(pricePerShare)

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// result = 500.0

UFix64 Division with Rounding

For convenience, the contract provides direct division functions that handle conversion and rounding in one call:

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access(all) view fun divUFix64WithRounding(_ x: UFix64, _ y: UFix64): UFix64

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access(all) view fun divUFix64WithRoundingUp(_ x: UFix64, _ y: UFix64): UFix64

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access(all) view fun divUFix64WithRoundingDown(_ x: UFix64, _ y: UFix64): UFix64

Example:

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let totalAmount: UFix64 = 1000.0

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let numberOfUsers: UFix64 = 3.0

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// Standard rounding

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let perUserStandard = DeFiActionsMathUtils.divUFix64WithRounding(totalAmount, numberOfUsers)

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// perUserStandard = 333.33333333

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// Round down (conservative for payouts)

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let perUserSafe = DeFiActionsMathUtils.divUFix64WithRoundingDown(totalAmount, numberOfUsers)

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// perUserSafe = 333.33333333

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// Round up (conservative for fees)

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let perUserFee = DeFiActionsMathUtils.divUFix64WithRoundingUp(totalAmount, numberOfUsers)

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// perUserFee = 333.33333334

Common DeFi Use Cases

Liquidity Pool Pricing (Constant Product AMM)

Automated Market Makers like Uniswap use the formula x * y = k. Here's how to calculate swap outputs with high precision:

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import DeFiActionsMathUtils from 'ContractAddress'

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import FungibleToken from 'FungibleTokenAddress'

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access(all) fun calculateSwapOutput(

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inputAmount: UFix64,

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inputReserve: UFix64,

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outputReserve: UFix64,

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feeBasisPoints: UFix64 // e.g., 30 for 0.3%

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): UFix64 {

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// Convert to high precision

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let input = DeFiActionsMathUtils.toUInt128(inputAmount)

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let reserveIn = DeFiActionsMathUtils.toUInt128(inputReserve)

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let reserveOut = DeFiActionsMathUtils.toUInt128(outputReserve)

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let fee = DeFiActionsMathUtils.toUInt128(feeBasisPoints)

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let basisPoints = DeFiActionsMathUtils.toUInt128(10000.0)

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// Calculate: inputWithFee = inputAmount * (10000 - fee)

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let feeMultiplier = DeFiActionsMathUtils.div(

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basisPoints - fee,

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basisPoints

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)

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let inputWithFee = DeFiActionsMathUtils.mul(input, feeMultiplier)

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// Calculate: numerator = inputWithFee * outputReserve

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let numerator = DeFiActionsMathUtils.mul(inputWithFee, reserveOut)

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// Calculate: denominator = inputReserve + inputWithFee

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let denominator = reserveIn + inputWithFee

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// Calculate output: numerator / denominator

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let output = DeFiActionsMathUtils.div(numerator, denominator)

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// Return with conservative rounding (round down for user protection)

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return DeFiActionsMathUtils.toUFix64RoundDown(output)

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}

Compound Interest Calculations

Calculate compound interest for yield farming rewards:

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import DeFiActionsMathUtils from 0xYourAddress

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access(all) fun calculateCompoundInterest(

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principal: UFix64,

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annualRate: UFix64, // e.g., 0.05 for 5%

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periodsPerYear: UInt64,

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numberOfYears: UFix64

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): UFix64 {

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// Convert to high precision

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let p = DeFiActionsMathUtils.toUInt128(principal)

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let r = DeFiActionsMathUtils.toUInt128(annualRate)

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let n = DeFiActionsMathUtils.toUInt128(UFix64(periodsPerYear))

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let t = DeFiActionsMathUtils.toUInt128(numberOfYears)

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let one = DeFiActionsMathUtils.toUInt128(1.0)

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// Calculate: rate per period = r / n

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let ratePerPeriod = DeFiActionsMathUtils.div(r, n)

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// Calculate: (1 + rate per period)

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let onePlusRate = one + ratePerPeriod

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// Calculate: number of periods = n * t

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let totalPeriods = DeFiActionsMathUtils.mul(n, t)

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// Note: For production, you'd need to implement a power function

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// This is simplified for demonstration

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// Calculate final amount with rounding

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return DeFiActionsMathUtils.toUFix64Round(finalAmount)

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}

Proportional Distribution

Distribute rewards proportionally among stakeholders:

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import DeFiActionsMathUtils from 0xYourAddress

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access(all) fun calculateProportionalShare(

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totalRewards: UFix64,

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userStake: UFix64,

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totalStaked: UFix64

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): UFix64 {

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// Convert to high precision

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let rewards = DeFiActionsMathUtils.toUInt128(totalRewards)

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let stake = DeFiActionsMathUtils.toUInt128(userStake)

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let total = DeFiActionsMathUtils.toUInt128(totalStaked)

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// Calculate: (userStake / totalStaked) * totalRewards

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let proportion = DeFiActionsMathUtils.div(stake, total)

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let userReward = DeFiActionsMathUtils.mul(proportion, rewards)

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// Round down for conservative payout

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return DeFiActionsMathUtils.toUFix64RoundDown(userReward)

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}

Price Impact Calculation

Calculate the price impact of a large trade:

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import DeFiActionsMathUtils from 0xYourAddress

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access(all) fun calculatePriceImpact(

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inputAmount: UFix64,

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inputReserve: UFix64,

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outputReserve: UFix64

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): UFix64 {

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// Convert to high precision

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let input = DeFiActionsMathUtils.toUInt128(inputAmount)

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let reserveIn = DeFiActionsMathUtils.toUInt128(inputReserve)

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let reserveOut = DeFiActionsMathUtils.toUInt128(outputReserve)

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// Calculate initial price: outputReserve / inputReserve

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let initialPrice = DeFiActionsMathUtils.div(reserveOut, reserveIn)

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// Calculate new reserves after trade

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let newReserveIn = reserveIn + input

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let k = DeFiActionsMathUtils.mul(reserveIn, reserveOut)

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let newReserveOut = DeFiActionsMathUtils.div(k, newReserveIn)

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// Calculate final price: newOutputReserve / newInputReserve

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let finalPrice = DeFiActionsMathUtils.div(newReserveOut, newReserveIn)

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// Calculate impact: (initialPrice - finalPrice) / initialPrice

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let priceDiff = initialPrice - finalPrice

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let impact = DeFiActionsMathUtils.div(priceDiff, initialPrice)

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return DeFiActionsMathUtils.toUFix64Round(impact)

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}

Benefits of High-Precision Math

Precision Preservation

The 24-decimal precision provides headroom for complex calculations:

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// Chain multiple operations without significant precision loss

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let step1 = DeFiActionsMathUtils.mul(valueA, valueB)

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let step2 = DeFiActionsMathUtils.div(step1, valueC)

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let step3 = DeFiActionsMathUtils.mul(step2, valueD)

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let step4 = DeFiActionsMathUtils.div(step3, valueE)

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// Still maintains 24 decimals of precision until final conversion

Overflow Protection

The contract uses UInt256 for intermediate multiplication to prevent overflow:

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// Internal implementation protects against overflow

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access(all) view fun mul(_ x: UInt128, _ y: UInt128): UInt128 {

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return UInt128(UInt256(x) * UInt256(y) / UInt256(self.e24))

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}

And includes explicit bounds checking when converting to UFix64:

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access(all) view fun assertWithinUFix64Bounds(_ value: UInt128) {

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let MAX_1E24: UInt128 = 184_467_440_737_095_516_150_000_000_000_000_000

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assert(

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value <= MAX_1E24,

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message: "Value exceeds UFix64.max"

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)

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}

Best Practices

Always Use High Precision for Intermediate Calculations

❌ Low precision (loses ~$0.50 per 1M USDC):

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let fee: UFix64 = amount * 0.003

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let afterFee: UFix64 = amount - fee

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let output: UFix64 = afterFee * price

✅ High precision (safe and accurate):

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// Convert once at the start

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let amountHP = DeFiActionsMathUtils.toUInt128(amount)

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let feeRate = DeFiActionsMathUtils.toUInt128(0.003)

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let priceHP = DeFiActionsMathUtils.toUInt128(price)

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// Perform all calculations at high precision

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let afterFeeHP = DeFiActionsMathUtils.mul(amountHP, DeFiActionsMathUtils.toUInt128(1.0) - feeRate)

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let outputHP = DeFiActionsMathUtils.mul(afterFeeHP, priceHP)

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// Convert once at the end with smart rounding

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let output = DeFiActionsMathUtils.toUFix64RoundDown(outputHP)

The pattern is simple: convert → calculate → convert back. The extra lines give you production-grade precision that protects your protocol from financial losses.

Always validate that inputs are within acceptable ranges:

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access(all) fun swap(inputAmount: UFix64) {

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pre {

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inputAmount > 0.0: "Amount must be positive"

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inputAmount <= 1000000.0: "Amount exceeds maximum"

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}

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let inputHP = DeFiActionsMathUtils.toUInt128(inputAmount)

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// ... perform calculations

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}

More Resources

• View the DeFiActionsMathUtils source code
• Flow DeFi Actions Documentation
• Cadence Fixed-Point Numbers

Key takeaways

• Use high precision (24 decimals) for all intermediate calculations
• Convert to UFix64 only for final results
• Choose appropriate rounding modes based on your use case
• Always validate inputs and test edge cases
• Document your rounding decisions for maintainability

Conclusion

DeFiActionsMathUtils gives Flow developers a significant advantage in building DeFi applications. With 24-decimal precision, it is orders of magnitude more accurate than typical blockchain implementations (which use 6-18 decimals). The standardized library eliminates the need to build custom math implementations.

The simple convert → calculate → convert back pattern, combined with strategic rounding modes and built-in overflow protection, means you can focus on your protocol's business logic instead of low-level precision handling. At scale, this protection prevents thousands of dollars in losses from accumulated rounding errors.