# Detailed Breakdown

Last updated

Last updated

Traditional systems with fixed borrowing costs often do not account for variable asset performance. With Vaultka, a better-performing linked vault translates to higher rewards for lenders.

$\small Bonus Reward = max(0, Rw-Base Reward ±Redistributor Balance Adjustment)$

where $Rw$ denotes the total rewards from all positions in the past week

Asset performance can be volatile. The pay-in-advance model solidifies upcoming rewards before they materialize, distributing them to lenders on an hourly basis.

Lenders benefit from the upside without the associated risks of underperformance. Vault users assume the risks, ensuring lenders always receive positive rewards.

If the actual reward from the previous week exceeds the base reward, the surplus (after adjusting for any credits/debits in the Vaultka redistributor) is shared as a bonus.

*(Scenario 1)*Should the past week's rewards be lower than the base reward, the lending pool still receives the base reward. Any shortfall is recorded against the Vaultka redistributor balance.

*(Scenario 2)*The total Reward will be adjusted based on the balance of the redistributor

*(scenario 3)*

Lending Pools in Pay-in-advance model

GM Leverage (v2-WATER)

Annotations:

APR:

Determining Actual Reward:

$Base Reward = \frac {Rq×(1-SD)}{90} × 7$

where $Rq$ denotes the total rewards from all positions in the previous epoch SD represents the daily standard deviation in percentage

$Total Reward = BaseReward + Bonus Reward$

$Rq$ denotes the total rewards from all positions in the previous quarter

$Rw$ denotes the total rewards from all positions in the past week

$SD$ represents the daily standard deviation in percentage

$TVL$ stands for the total value locked from realized positions

$\Delta Ru$ signifies the change in unrealized positions

$\sum$ is the mathematical representation for summation

$BaseAPR = \frac {BaseReward} {TVL}$

$Bonus APR = \frac {Bonus Reward} {TVL}$

$\small ActualReward=\sum TotalRewardSplitFromRealizedPositionsInLinkedVaultsOverThePastWeek$