# APR

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APR (Annual Percentage Rate) within LayerBank is composed of the following components and is adjusted in real-time based on the utilization of LayerBank's lending services:

* **Supply(Base) APR**: This represents the basic interest generated on the assets supplied. It increases as the value of the supplied assets appreciates.
* **Borrow(Base) APR**: This is the basic interest rate applied to the borrowed assets. Interest accrues as the borrowed asset's size increases. It can be negative, indicating that interest is paid by borrowers.
* **Supply Reward APR**: This is the LAB token reward offered by LayerBank for providing assets. Users receive LAB tokens as rewards for supplying assets to the platform.
* **Borrow Reward APR**: This represents the LAB token reward provided by LayerBank for borrowing assets. It is always a positive value, and borrowers receive LAB tokens as rewards.

The Reward APR can be boosted up to three times based on one's xLAB (stake version of LAB) market share compared to the total user base.

The Net APR is calculated as follows: Net APR = Supply APR (Supply(Base) APR + Supply Reward APR) - Borrow APR (Borrow(Base) APR + Borrow Reward APR). It can be negative if Borrow(Base) APR doesn't cover the entire yield.

For example, if:

* Supply APR is 5%
* Supply Reward APR is 5%
* Borrow APR is -10%
* Borrow Reward APR is 15%

If a user deposits 100 USDC and borrows 50 USDC, they would earn a basic supply yield of 5 USDC, along with $5 (Supply reward) + $7.5 (Borrow reward) in LAB rewards annually. However, they would also pay 5 USDC in annual borrowing interest. When all values are calculated in dollar terms, the user would generate a yield of $7.5 annually, resulting in a Net APR of 7.5%.

Additionally, LayerBank has added LST assets to the money market. Staking rewards for these LST tokens are generated on the Ethereum mainnet. While they don't generate real-time rewards on Layer2 chains, they can be bridged to the Ethereum mainnet to claim accumulated staking rewards in assets like Lido (wstETH), StakeStone (Stone), and Mountain Protocol (wUSDM). LayerBank provides information on these staking rewards, and you can find the APR for each token next to their respective logos.


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