I am curious how the APR gets paid when the APR is negative, meaning the borrow APR is greater than the distribution APR. So far it’s only been a few tenths of a percentage point but it leads to the question of where does this cost go?
When it’s a positive APR we get ANC tokens, collateral principal and borrowed amount don’t change. When it’s a negative APR does it ADD to the borrowed UST amount? Surely it does not touch the collateral tokens.
Thank you
When it’s a positive APR we get ANC tokens, collateral principal and borrowed amount don’t change
The last part is not true, your borrowed amount always went up based on the borrow APR.
Your were compensated in ANC tokens that you could claim in your dashboard. So far the value of the tokens was higher than the increase in the borrowed amount, now it’s not.
okay. I was not aware of that. I don’t think I noticed the borrowed value going up over time but I was not paying a lot of attention. I paid more attention to the LTV which fluctuated based on the price of the collateral assets.
Thank you