Baker Academy: Terminologies & Calculation Methodology

Total Value Locked

  • Value of total LP tokens locked in the farms
  • Value of deposits that are not borrowed (the borrowed amount is already accounted for in the LP value)

Lending

Pictures are for reference only
  • Lending interest rate is a floating rate based on the utilization of the pool. We use a triple-slope interest model to optimize the borrowing rate. You can see our interest rate model here.
  • Lending APY accrues and autocompounds in your ibTokens. When withdrawing, you will see their value has grown above the base token. ​
  • Lending interest is compounded every second. Thus, lending APY shown is calculated using continuous compounding; APY = e ^ (APR) — 1.
  • Staking APY is earned in BAKER by staking your ibTokens on the Stake page.
  • APR is calculated based on the value of BAKER rewards being distributed per block divided by the total value of ibTokens being staked.
  • The APY shown assumes daily compounding of the rewards.
  • We’ll post an article exclusive on how ib Tokens work

Yield Farming

Pictures are for reference only
  • This part of the yield refers to income from liquidity incentives provided by AMM platforms. For example, PancakeSwap provides CAKE token rewards for LPs in selected pools.
  • We compound CAKE rewards for you by selling CAKE into BNB/BUSD and adding that back into your position as LP tokens. This yield will reflect in your position value rising over time.
  • The frequency of auto-compounding is not set. It occurs every time a user interacts with the pool (which can be quite frequent).
  • APR is calculated based on the value of CAKE rewards being distributed per block divided by the total value of reserves in the liquidity pool.
  • Given the high frequency of auto-compounding, farming yield APY is calculated using a continuous compounding formula.
  • DEXes charge fees for every trade, a portion of which goes to liquidity providers
  • PancakeSwap charges 0.25% fees for every trade, of which .17% accrues to liquidity providers
  • Trading fees APR is calculated using the average of actual trading volume.
  • Leveraged yield farmers will earn BAKER rewards based on the size of their borrowed assets relative to the total borrowed assets.
  • APR is calculated based on the total value of BAKER rewards distributed per block divided by your equity value.
  • APY is calculated assuming daily compounding.
  • Borrowing interest APR is a floating rate based on the utilization of the lending pool. We use a triple-slope interest model to optimize the borrowing interest. You can see our interest rate model here.
  • Interest is calculated and compounded every second.
  • APY shown is based on a continuous compounding formula.
Pictures are for reference only.
  • The total value of your farming position.
  • This shows the value of the underlying assets in your position if they were converted into your borrowed primitive — e.g., BNB, BUSD, etc. This is what this position size would give you in the borrowed primitive after price impact and trading fees (though it includes debt value).
  • Total debt value of your farming position.
  • This value is the sum of your borrowed principal and accrued interest.
  • Equity Value is what you can expect to receive back if you close your position and choose to receive all the assets back in borrowed primitive.
  • Equity Value = Position Value — Debt Value.
  • APY calculation follows the same formula discussed above and is based on the current leverage level.
  • Debt Ratio = Debt Value / Position Value
  • This is the Debt Ratio threshold for your position. Beyond this limit, your position could be liquidated.
  • This is the buffer between the current Debt Ratio and the Liquidation Threshold, aka your safe space.

Join Baker Finance 🦅

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Baker Finance

Baker Finance

6 Followers

The first financial service aggregator site, kick-starting as a leveraged yield farming protocol