Implementation explained

Global currentStableBorrowRate and users' local borrow rate

There is a global stable rate determined by a model; each user accrues interest based on the stable rate they locked-in. How does this work?

Global stable rate

Each asset in Aave has its configuration data contained within a struct ReserveData. This can be accessed via an internal mapping _reserves.

Held in storage, each ReserveData, contains a uint128 variable currentStableBorrowRate.

• This is the stable rate enjoyed by incoming stable borrows, regardless of user.

• This global value is determined by the Utilization model we described above.

Held in storage, the ReserveData struct contains variable: currentStableBorrowRate

User's stable rate

Upon taking up a stable loan, the rate enjoyed by the user is stored in _userState[address].additionalData, as defined on the stableDebtToken contract.

StableDebtToken is IncentivizedERC20

• .additionalData is his weighted average stable rate, based on all his previous borrows.

• This is the rate at which interest compounds for the user.

• Each time a new stable borrow is taken, this is incremented:

  • (oldAmount * oldRate) + (newAmount * newRate) / totalAmount

_userState[address].additionalData is updated within the mint function of stableDebtToken.

_avgStableRate

An internal storage variable on the stable debt token contract, it is the weighted average rate across all the stable borrows taken to date, system-wide.

Incremented like so:

_avgStableRate = (currrentAvgStableRate * previousSupply) + (newRate * newAmount) / (_totalSupply() + newAmount)

Difference between _avgStableRate and currentStableBorrowRate

• _avgStableRate reflects the average rate at which interest is being accrued by stable borrowers

• currentStableBorrowRate is the rate for the next incoming stable borrow as determined by the Utilization model.

borrow & mint

mint returns the following two values which are stored in reserveCache:

• reserveCache.nextAvgStableBorrowRate = vars.currentAvgStableRate

• reserveCache.nextTotalStableDebt = vars.nextSupply

They are used later in calculateInterestRates to update system-wide rates.

updateInterestRates::calculateInterestRates

After a loan is taken, calculateInterestRates is ran to update the system-wide rates:

• Liquidity rate

• Stable borrow rate

• Variable borrow rate

totalStableDebt used to calculate totalDebt and averageStableBorrowRate used to calculate overallBorrowRate, and consequently, currentLiquidityRate.

Stable borrow rate is updated, accounting for increase in stable loans taken; as are the other rates.

The updated stable rate is stored in reserve.currentStableBorrowRate - in storage.

Visual Aid