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Accrual Methodology
Since there are multiple blocks on Solana per second, the platform much safeguard itself against manipulation from bad actors. One way a bad actor might try to exploit the protocol is by borrowing proceeds and repaying those proceeds prior to the interest charge ever accruing. To safeguard against these types of volunerabilities the protocol must accrue interest APR and supply APY at each block. The below will discuss the way in which charges and rewards accrue.
The protocol must estimate the number of blocks over any period of time, instead of being charged monthly like in traditional finance, the borrower and lender will see accruals with each block processed on Solana.
Last modified 1yr ago