OrdiLend Docs
  • Introduction
  • Participate Testnet
  • Tokenomics
  • Roadmap
  • 🌉Bridge
    • Overview
    • Technical Implementation
    • Advantages
    • Process
  • 🏦Lending Protocol
    • Overview
    • Interests
    • Borrower Interest Rate
    • Supplier Interest Rate
    • Liquidation
    • Parameters
    • APR
  • Terms of Service Agreement
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  1. Lending Protocol

APR

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Last updated 1 year ago

Within OrdiLend, the APR (Annual Percentage Rate) is a dynamic measure, reflecting real-time adjustments based on the platform's lending activity. It encompasses several components, each contributing to the overall financial experience for users:

Components of APR in OrdiLend:

  • Supply(Base) APR: This is the foundational interest accrued on supplied assets, which escalates as the value of these assets increases.

  • Borrow(Base) APR: The fundamental interest rate charged on borrowed assets, which accumulates in accordance with the size of the borrowed asset. This rate might be negative, signifying that borrowers are paying interest.

  • Supply Reward APR: OrdiLend incentivizes users with $ODLD tokens for supplying assets to the platform, enhancing the attractiveness of asset provision.

  • Borrow Reward APR: This aspect represents the $ODLD token rewards allocated by OrdiLend for asset borrowing, consistently maintaining a positive value to encourage borrowing activities.

The Reward APR has the potential to triple, contingent upon an individual's xODLD (the staked version of $ODLD) market share relative to the entire user base.

Calculation of Net APR:

The Net APR is deduced as follows: Net APR = Supply APR (comprising Supply(Base) APR + Supply Reward APR) subtracted by Borrow APR (encompassing Borrow(Base) APR + Borrow Reward APR). The Net APR could manifest as negative if the Borrow(Base) APR does not fully offset the yield.

Illustrative Example:

Consider a scenario where:

  • The Supply APR stands at 5%

  • The Supply Reward APR is also at 5%

  • The Borrow APR is set at -10%

  • The Borrow Reward APR is at 15%

In this case, a user depositing 100 USDC and borrowing 50 USDC would accrue a basic supply yield of 5 USDC, in addition to $5 (Supply reward) + $7.5 (Borrow reward) in $ODLD rewards annually. However, they would need to cover 5 USDC in annual borrowing interest. When all calculations are made in dollar terms, the user would realize an annual yield of $7.5, rendering a Net APR of 7.5%.

OrdiLend, adhering to LayerBank's established code and mechanisms but transitioning to the $ODLD token, maintains the integrity of these financial formulas, ensuring a consistent and reliable APR framework for its users.

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