DeFi Collateralized Lending & Friction Simulator

Utilization Rate 75.00% Optimal zone

Borrow APY 5.75% Cost to borrowers

Supply APY 3.88% Net yield to depositors

Available Liquidity $250,000 Unborrowed buffer

Net Protocol Revenue $4,312.50 Annual reserve fee

Health Factor 1.0667 At max LTV limit

Kinked Interest Rate Curve

75.0% Utilized

Base Rate 2.0%

Optimal Kink Point 80.0%

Slope 1 (Below Kink) 4.0%

Slope 2 (Above Kink) 75.0%

Pool Dynamics & Friction Stress Test

Solvent

Pool Balance Distribution $1,000,000 Total Supplied

Borrows: $750k

Liquidity: $250k

Active Borrows ($750k)

Available Reserves ($250k)

Total Supplied Liquidity $1,000,000

Total Borrowed Amount $750,000

Reserve Factor (Protocol Fee) 10.0%

Max Loan-To-Value (LTV) 75.0%

Liquidation Threshold 80.0%

Step-By-Step Mathematical Proof

Utilization U = Borrows / Supplies 750,000 / 1,000,000 = 75.00%

Borrow APY = Base + (U / U_opt) * Slope1 2.00% + (0.75/0.80)*4.00% = 5.75%

Supply APY = Borrow APY * U * (1 - Reserve) 5.75% * 0.75 * 0.90 = 3.88%

Health Factor = Liquidation Thresh / Max LTV 0.80 / 0.75 = 1.0667