Numbers for nerds

Health calculations

Borrowing Power ratio (Pr): The borrowing power ratio of an asset is a number between 0 and 1 and describes how much you can borrow against this certain asset. It is calculated as:

$$Pr = {P \over P + 1} \\ \text{}\\ \begin{align} & \text{Pr = borrowing Power ratio} \\&\text{P = borrowing Power} \ \\ \end{align}$$

Borrowing Power	Formula	Borrowing Power ratio
1x	1 / (1+1)	0.5
3x	3 / (3+1)	0.75
5x	5 / (5+1)	0.8333
10x	10 / (10+1)	0.909
25x	25 / (25 + 1)	0.9615

Collateral (Ct & C): DegenPrime being fully cross-margin, means that "collateral" as such does not exist, but is either a token-derived collateral value (Ct):

$$Ct = {At-Bt} \\\text{}\\ \begin{align} &\text{Ct = Collateral of token} \\ &\text{At = Account's token value} \\ &\text{Bt = token borrowed value} \end{align}$$

Or a portfolio-derived value (C):

$$C = {Ta-Tb} \\\text{}\\ \begin{align} &\text{C = Collateral} \\ &\text{Ta = Total account value} \\ &\text{Tb = Total borrowed value} \end{align}$$

In words: The dollar value of your collateral is equal to the dollar value of your assets, minus the dollar value of your borrowed tokens, either for one token, or for the whole portfolio.

At launch all integrated tokens have either 0x or 5x Borrowing power. If they have 0, the Borrowing Power ratio is 0 as well.

Cross-margin Borrowing Power

How much you can actually borrow against your deposit is not only dependent on the borrowing power of the token provided, but also on the borrowing power of the token borrowed. This means that if you provide a token with 5x borrowing power, and borrow a token with 2x borrowing power, the exact ratio at which the health meter reaches zero is neither 2x nor 5x, but rather somewhere in between. This is due to DegenPrime being cross-margin. Below are the calculations how the exact Health can be measured.

Health of single asset (Ha)

$${Ha = }{Pr*Ct+Pr*Bt-Bt\over Pr*Ct} *100\% \\$$

Examples

Borrowing Power, Collateral, Borrowed value	Formula	Asset Health
25x, $1000, $15000	(0.9615*1000 + 0.9615 * 15000 - 15000) / (0.9615*1000) *100%	40%
5x, $100, $250	(0.8333*100 + 0.8333 * 250 - 250) / (0.8333*100) *100%	50%
5x, $120, $250	(0.8333*120 + 0.8333*250 - 250) / (0.8333*120) * 100%	58.3%
3x, $100, $101	(0.75 * 100 + 0.75 * 101 - 101) / (0.75*100) * 100%	66.3%

Health of all assets (H)

Weights

In order to calculate a cross-margin portfolio, we need to take different borrowing powers and token prices into account. To do this we calculate the weighted collateral value of a token (Cw) and the weighted borrowed value (Bw) of a token. By multiplying either with both the token price and Borrowing Power ratio (Pr), we get a value that represents that token's weighted collateral/borrowing value.

$${Cw = CtPtPr} \\ {Bw = BtPtPr} \\\text{} \\\begin{align} &\text{Ct = Collateral of token} \\&\text{Bt = Borrows of token}\\&\text{Pt = Price of token} \end{align}$$

Compounding the collateral weights of all tokens within one Prime Account, we get the portfolio's Total Collateral weight (ΣCw). Compounding the borrowed weights of all tokens within one Prime Account we get the portfolio's Total Borrowed weight (ΣBw).

By using the same formula we used with the single-asset health meter, but taking into account the different token prices and borrowing powers, we get:

$${H = }{ΣCw+ΣBw-B\over ΣCw} *100\% \\$$