Bank

1. Utilization

Utilization refers to the proportion of funds used in H2O Finance Bank for each asset. The fund utilization rate determines the borrowing APR that borrowers have to pay, thereby the lending APR that lenders will receive.

Formula: Utilization = Total Borrowed / Total Deposit

2. Lending APR

It calculates what percentage of the principal you'll get paid each year by depositing funds into the earning pools of H2O Finance Bank. If you deposit BNB, you will get BNB when withdrawing.

Formula: Lending APR =Borrowing APR*Utilization* 80%

3. Staking APR

The yield rate of H2O rewards earned by lenders who stakes hTokens into the H2O reward pool.

Formula:Staking APR = (Annual output of H2O from the pool * H2O price)/total locked value of the pool

4. Total APR

This is the sum of the interest rate earned on lending interest and H2O reward.

Formula: Total APR= Lending APR + Staking APR

5. APY (compounding interest)

The annual percentage yield (APY) has taken into account the effect of compounding interest. Unlike simple interest, compounding interest is calculated under the daily return rule.

6. Exchange rate of hToken to Token

The rate of hToken to Token is based on the actual value in the contract.The amount of hToken represents their share in the Bank (including deposit and staking). As deposit and withdrawal take place all the time, the exchange rate will continue to change dynamically.