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💵Fulcrum Strategy Reward Calculation

Correlation of Utilization Rate & Borrow APR

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 3% to 18%

  • 90 - 100% Utilization Rate: Interest rates will experience a linear increase from to 18% to 23%

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

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

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

Formula

LenderAPR=BorrowAPR×UR×0.9LenderAPR = 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

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

1

Yield Determination: The yield paid to lenders is influenced by the JLP's APR from the previous 4 weeks.

2

Borrow APR: The borrow APR will be deducted

Formula

APR=A+L(AX)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

Bob has $1000 and chooses to leverage for 5X, while:

JLP APR = 65.45%

Borrow APR = 25%

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

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