Borrow APY Formulas

Used for calculating Borrow APY for Prologue Leverage

Let:

$base = 4.5\%$

$slope_1 = 7\%$

$slope_2 = 50\%$

$slope_3 = 600\%$

$slope_L = 200\%$

$kink_1 = 75\%$

$kink_2 = 85\%$

$kink_L = 60\%$

Where:

$U$ = $Loans / TVL$ in vault

$LTV =$ Loan to Value

If:

$LTV > kink_L$,

The following function is added to $base$:

$(LTV * slope_L) - (kink_L * slope_L)$

The following logic is used to calculate borrow APY:

If:

$U <= kink_1$,

$APY = base + (U*slope_1)$

If:

$kink_1 <= U <= kink_2$

$apy = base + (kink_1*slope_1) + ((U - kink_1) * slope_2)$

If:

$kink_2 <= U$,

$apy = ((base + (kink_1 * slope_1) + ((kink_2 - kink_1) * slope_2)) + ((U - kink_2)*slope_3)$