Computing Supply & Borrows

Monitoring Instructions:
  • RefreshReserve - handles all the tracking work and updates ratio
  • RefreshObligation - computes obligation balances based on reserve ratios
For Supply:
  • cToken Ratio acts as a % ownership of the LP
  • For a pool with 99 USDC, if you deposit 1 USDC, you will own 1% of the pool
  • When the RefreshReserve occurs, the pool now has 110 USDC. Your 1% is now worth 1.1 USDC.
  • Total Reserves / cTokens Minted
For Borrows:
  • APY is used to update CumulativeBorrowRate as an index
  • When borrowing, calculate the initial CumulativeBorrowRate (let's say 1)
  • RefreshReserve → Updates the CumulativeBorrowRate (let's say its 1.02)
  • Obligation borrows would be increased by *1.02/1 or 2%
/// Compound current borrow rate over elapsed slots
fn compound_interest(
&mut self,
current_borrow_rate: Rate,
slots_elapsed: u64,
) -> ProgramResult {
let slot_interest_rate = current_borrow_rate.try_div(SLOTS_PER_YEAR)?;
let compounded_interest_rate = Rate::one()
self.cumulative_borrow_rate_wads = self
self.borrowed_amount_wads = self
Why: For efficiency, the RefreshReserve just has to update the cToken Rate or the CumulativeBorrowRate instead of updating every obligation’s supply or borrow numbers. Tracking is only done at the ratio/index level, and never at an individual level unless changes to the user's positions are being made.