How to calculate the Net APY that is displayed for users on https://app.compound.finance/

net_apy.md

Net APY Calculation

1. Convert all supplied and borrowed asset amounts to a single asset (like USD or ETH).
2. Calculate the sum of (suppliedAmount * supplyApyAsDecimal - borrowedAmount * borrowApyAsDecimal) for all underlying assets.
3. If the calculated sum from the previous step is >0 then Net APY = 100 * (sum / totalSuppliedValue). If the calculation from the previous step is <0 then Net APY = 100 * (sum / totalBorrowedValue). If the calculation from the previous step is 0 then Net APY = 0.

Example

Net APY:

• -7.29%

Supplied Assets:

• 0.6 ETH ($260.20) @ 1.11% APY

Borrowed Assets:

• 75 BAT ($26.56) @ 5.57% APY
• 100.02 USDT ($100.02) @ 10.64 APY%

Calculation:

(260.20 * 0.0111 - 0 * 0) + (0 * 0 - 26.56 * 0.0557) + (0 * 0 - 100.02 * 0.1064) = -9.2333

100 * (-9.2333 / (26.56 + 100.02)) = -7.294438299889398

-7.29%

For a market, how are you retrieving the suppliedAmount for an address? I can get my current cToken balance and exchange for underlying amount from each cToken contract, but not as easy to determine the original amount supplied? I was thinking a hard way might be to look at transaction history of the address against the cToken contract.

If the account transfers out cTokens, then their net APY reduces, because their account is entitled to fewer underlying tokens. So using the cToken balance is valid.

Okay I see, it's just a snapshot rate for an account. Has nothing to do with historical rate or historical balance at all! Thanks :-)

this formula for the net APY depends on the value of the funds you put in... that should not be the case because the netAPY should only depend on the supply APY, borrow APY and loan to value ratio.... but definitely not on the account value...

As of now on Compound on Rinkeby network, the divisor seems to be the sum of the assets you've supplied, i.e., their definition seems to be "Net APY compared to what you invested".

This gets the correct value for me:

Net APY = 100 * (sum / totalSupplied)

Don't need the conditional check on if the sum is positive or negative.

Example from my rinkeby wallet (using DAI and USDC so no currency conversion step here):

sum = (14.53*0.0691 + 59.99*0 - 34.24*0.1369)/(14.53+59.99) = -0.0494
net apy = sum * 100 = -4.94%

Hm, something is not adding up. I did an example calculation and got a very different value than shown on the website, perhaps it's because the website somehow includes COMP while you don't? Not sure how, though.

I get a very different value in my testing application