💵Fulcrum Strategy Reward Calculation

Correlation of Utilization Rate & Borrow APR

• 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%.

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

$$LenderAPR = Borrow APR \times UR$$

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

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

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%

---

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.