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Health and Earning Metrics

Health and Earning Metrics are displayed at the top of each pool to help users track their net yield and manage their portfolio risk. Users should find a balance between maximising their borrowing capabilities and budgeting for volatility in the market to avoid liquidations.
Pool Data
  1. 1.
    Total Supply - total value of principal deposited and interest accrued in the pool
  2. 2.
    Total Borrow - total value of loan principal and interest owed in the pool
User Data
  1. 1.
    Net APY - the net annual percentage yield earned or paid. A positive Net APY represents that the user is earning more than he/she has to pay out in interest whereas a negative Net APY means the user is paying more interest than what is being earned
  2. 2.
    Borrow Utilization - see section below.
  3. 3.
    Borrowed - total value of loan principal and interest owed of the user.
  4. 4.
    Limit - sum of the market value of the user's collateral discounted by each asset’s Collateral Factor
  5. 5.
    Collateral - Sum of the market value of the user's collateral.

Borrow Utilization

The Borrow Utilization is a metric that reflects a user's leverage and portfolio health. It is calculated by dividing a user’s Liabilities by their Risk-adjusted Collateral.
BorrowUtilization=LiabilitiesLimitBorrow Utilization = \cfrac {Liabilities}{ Limit}
where:
  • Limit: Sum of the market value of a user's collateral discounted by each asset’s Collateral Factor
  • Liabilities: The sum of the market value of a user's outstanding borrowings and accrued interest
A Borrow Utilization above 100% means that a user’s liabilities now exceed his/her borrowing capacity. During liquidation, the debt are repaid (either partial or full repayment) and the liquidation bonus is taken from the available collateral.
The Borrow Utilization of your portfolio is influenced by changes in the underlying value of your deposits. For example, say you deposit ETH as collateral and use that to borrow DAI, and if the value of ETH drops, the underlying value of your collateral will decrease. This can negatively impact your Borrow Utilization and increase the risk of liquidation.
Maintaining a low Borrow Utilization can provide you with portfolio flexibility in two ways:
  1. 1.
    Decreased likelihood of liquidation, especially when fluctuating assets are used as collateral (low-risk strategy)
  2. 2.
    Improved borrowing eligibility, allowing you to leverage more collateral (high-risk strategy)