Lending

Lending metrics

Lending protocols are decentralized finance platforms that allows users to lend and borrow cryptocurrencies without relying on traditional financial institutions or intermediaries. On BunnyBoard, we track these key metrics below:

Metric	Description
Total asset deposit	The full amount of assets held within the protocol, including those supplied by lenders and collateral provided by borrowers to secure loans.
Supply-side deposit	Supply-side deposits represent the total amount of assets deposited into the protocol by lenders, making them available for borrowing.
Active loans	Active loans represent the total amount of assets currently borrowed by users, also referred to as outstanding debts.
Total value locked	Total value locked (TVL) represents the total assets held within a protocol's smart contracts. It is calculated as the difference between the total assets deposited and the active loans, reflecting the overall liquidity in the system.
Fees	Fees are generated from borrowing interest and any applicable borrowing fees. Borrowing interest is calculated as the product of active loans and the interest rate: `interest = active loans * interest rate` Borrowing fees are tallied by summing all fees paid during borrowing and lending activities.
Supply-side revenue	The amount of fees go to lenders/suppliers.
Protocol revenue	The amount of fees go to protocol treasury.
Supply-side ROI	The return on investment of suppliers/lenders by lending assets on protocol. `ROI = Supply-side revenue / Supply-side deposit`.
Utilization	Utilization measures the percentage of total supplied assets that are currently being borrowed. It reflects how efficiently a protocol's liquidity is being used. Utilization is calculated by dividing the active loans by the supply-side deposit, providing insight into the demand for loans relative to the available supply. `U = Active loans / Supply-side deposit` The higher rate, the market is more usage and more efficient.
Collateralization	Collateralization measures the ratio of collateral deposited by borrowers to the loans they've taken out. It reflects how much security a borrower provides to back their loan, ensuring that the loan is adequately covered by collateral in case of default. A higher collateralization ratio indicates a safer loan, while a lower ratio suggests higher risk for lenders. `C = Total asset deposit / Active loans` The higher rate, the market is safer.
Volumes	In lending protocols, there are five key activities: 1. deposit - assets are supplied by lenders or deposited as collateral by borrowers, 2. withdraw - lenders withdraw their supplied assets or borrowers withdraw their collateral, 3. borrow - Borrowers take out loans by borrowing assets, 4. repay - borrowers repay their loans, 5. liquidate - liquidators sell off collateral assets to repay defaulted loans. We calculate volumes by measuring the amount of assets involved in these transaction activities.