# Fulcrum Strategy Reward Calculation

## Correlation of Utilization Rate & Borrow APR <a href="#correlation-of-utilization-rate-and-lending-fee" id="correlation-of-utilization-rate-and-lending-fee"></a>

### USDC/USDT

* 0 - 80% Utilization Rate: Interest rates will grow linearly from 10% to 25%
* 80 - 100% Utilization Rate: Interest rates will experience a linear increase from 25% to 45%

### SOL

* 0 - 90% Utilization Rate: Interest rates will grow linearly from 5% to 20%
* 90 - 100% Utilization Rate: Interest rates will experience a linear increase from to 20% to 25%

This two-tiered interest rate framework is established to guarantee a reliable income stream for lenders at varying levels of pool utilization.&#x20;

The progressive increase in interest rates as utilization approaches its upper limit is a strategic measure to balance the attraction of lending capital with the sustainability of the financial ecosystem. Additionally, the base rate will be subject to a monthly review and discussion.

***

## Lending Vault Reward <a href="#lending-vault-reward" id="lending-vault-reward"></a>

The lending interest is corresponding to utilization rate & borrow APR, please refer to the example below.

### Formula

$$
LenderAPR = Borrow APR \times UR\times0.9
$$

\*0.9 is because a 10% fee from the interest returned to lenders will be shared to team

### Example

Lending Pool Size: 1000 USDC

Borrower has $100 and leverage 10X, meaning $900 has been borrowed

So, Utilization Rate = 90%

Borrow APR = 30%

```
Lender APR = 30% * 90% = 27%
```

***

## Leverage Vault Reward <a href="#leverage-vault-reward" id="leverage-vault-reward"></a>

To calculate the yield for borrowers in a simplified manner, it also considers two steps:

{% stepper %}
{% step %}
**Yield Determination**: The yield paid to lenders is influenced by the [JLP's APR](https://jup.ag/perps-earn) from the previous 4 weeks.
{% endstep %}

{% step %}
**Borrow APR:** The borrow APR will be deducted
{% endstep %}
{% endstepper %}

### Formula <a href="#formula-1" id="formula-1"></a>

$$
APR=A+L(A-X)
$$

Where

A = Benchmark APR, the JLP APR from previous week

L = Leverage Multiple - 1

X = Borrow APR\*

\*Borrow APR varies according to the token utilization rate

### Example <a href="#example-1" id="example-1"></a>

Bob has $1000 and chooses to leverage for 5X, while:&#x20;

JLP APR = 65.45%&#x20;

Borrow APR = 25%

```
Leverage Yield = 65.45% + 4(65.45% - 25%)
Leverage Yield = 227.25%
```

***

{% hint style="warning" %}
It is imperative to note that interest rates are subject to weekly adjustments based on prevailing market conditions. For the latest APR updates, please consult the official website regularly.
{% endhint %}


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