Comp APY Exploration

In this report, we will breakdown the borrows apy and supply apy for compound finance. Next we will look into the changes behind for each of the apy.

https://velocity-app.flipsidecrypto.com/velocity/visuals/f5431b80-83d3-454d-9dcc-0e63a876347c/46f90fcf-25a8-416f-9abc-d40ce6d96294

Borrow APY on comp

https://velocity-app.flipsidecrypto.com/velocity/visuals/343cc362-c467-4f47-977c-c927f3130a0c/c99c3a76-10c0-422c-b9b8-35eab61558a2

Supply APY on comp

Currently the highest borrow APY on comp is for USDT and the lowest borrow APY is for WBTC. In the other way, the highest supply APY is USDT and the lowest supply APY is ETH. The APY changes due to to total supply and total borrows changes in compound finance. Let’s see the how it changes

https://velocity-app.flipsidecrypto.com/velocity/visuals/4f3940c8-a110-41cf-8e96-9528f6e7f038/46f90fcf-25a8-416f-9abc-d40ce6d96294

Borrow total on comp

https://velocity-app.flipsidecrypto.com/velocity/visuals/9daaadfa-545c-4e9c-b5cd-e843fc476e8c/c99c3a76-10c0-422c-b9b8-35eab61558a2

Supply total on comp

If we compared both the total borrow and supply chart, we can see the overall changes. For the total borrow chart, we can see most of the loan is from USDC (blue), DAI (Orange), and USDT(green). However, from the supply chart, we can see the mostly from ETH(dark blue), WBTC(yellow), USDT(green), DAI(orange), USDC(blue).

First point, why is so the supply and borrow APY for USDT is the highest? The high supply APY is to encourage supplier to supply more USDT into the pool and the borrow APY for USDT is to discourage people to loan more of USDT. This is because the loan amount of USDT in comp is catching up with the supply of USDT. If this situation continues, the supply of USDT will be running out and borrowers could not borrow more USDT. Second, the lowest supply for APY of ETH is due to the overwhelming supply of ETH into the pool, while there is rarely any borrower to borrow ETH causing supply is overflow compared to loan amount of ETH.

Source: https://app.flipsidecrypto.com/dashboard/comp-apy-exploration-WAZoRX

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