At WhaleLend, we get asked daily the following questions by our users: “So…… what kinda of interest returns can I get from margin lending?”.
To which we typically respond with something academic: “Well, the lending market where WhaleLend gets the interest for you are public and very active, thus the rates fluctuate greatly on a liquid exchange such as BitFinex, etc…”
Then that user typically goes “aha, okay” or “Zzz. 😴”
To settle this question once for all, we went back to the cave, crunched millions of data points and came up with the WhaleLend Historical Interest Rate Graph for you guys based on BitFinex data. We did this because:
There are two main sections of our Interest Rate Graph:
1. The Rate + Volume Graph
Rate (% P.A.): Our backend combs through every single loan closed on BitFinex in real time and calculate a VWAR (Volume Weighted Average Rate) at 10 mins interval. The method is synonymous to that of VWAP, which is widely used in equity markets in traditional finance.
For example, there are roughly 7.6 million loans closed on BitFinex in USD alone in the past 12 months. A data point of volume-weighted average rate is then calculated for each and every 10 mins windows during the past year.
Do notice that the rates quoted on BitFinex are day rates, we annualize that by multiplying the raw day rate figure by 365 (12.5% per year is a lot easier to understand then 0.034% per day).
Vol: Volume of closed loans with a 10 mins window. This is particularly relevant for ticking out the abnormally high or low rates and understand any given interest rate’s context. The volume is always denominated in the token of the native selection, e.g. if you are looking at BTC rates, the Vol is shown in the quantity of BTC.
Time Period selection: you can use either the “From… To…” boxes above the graph or the slider below the graph to zoom in on your selection.
In the example below, we can see that on Wednesday, October the 17th, from 0750–0800 UTC, a total of 36.35 BTC loans were closed at a VWAR of 0.0364% per day or 13.28% per year.
2. The Token Selection Tiles
Each token tile serves two functions:
As a token rate information tile,
As a selector,
We have 3 subsets of data available for viewing and all are completely FREE.
It is not as simple as that. We will write a longer post explaining the details, but here is a short example:
Say on the 1st of Nov, 2018, the current market rate for BTC loans is exactly 10% annualized. This means if we loan BTC out for a whole year at this rate, the return would be 10%.
In reality, WhaleLend may loans out 100 BTC for 30 days. If the loan actually lasts 30 days, then the interest income would be 100 BTC x 10% /12 months which gives about 0.83 BTC as interest income.
Now the complications come from two things. 1) the loans rarely last its full maturity (sometimes they last merely hours) 2) because of this, your real return, in the end, is a series of loans given out at different rates and lasts as long as it does.
It is WhaleLend’s job to deal with all this complication and optimize to capture these high peaks of rates you see in these graphs. It is scientifically a non-trivial task.
Thus, the rates you see is a GOOD APPROXIMATION of your return but won’t match it exactly.
We hope this will be a useful tool and interesting for you. If you have any comments or questions, please post those to our Telegram group. Remember that you get access to an unlimited version of the graph by signing up (you will get a 3 months 20% income boost with this link!) and making your first deposit.
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