A4988 Allegro's driver limit current calculation
Your calculation is correct, with 0.1 Ohms sense resistors requiring a 1.25 V reference voltage.

The absolute maximum sense(1,2) voltage is 0.5 V and you are only using 0.16 V of that range at full scale (so DAC step size around 10 mV).
This seems a little low, and I'd be tempted to increase the sense resistors to 0.2 Ohm, which uses 0.32 V full scale and increases step size to 20 mV and the reference to 2.56 V.
You could use either a simple voltage divider from your MCU VCC or something like an TL431/TLVH431 if you want the lowest noise possible on Vref.