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.

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