VariableDebtToken

Note that debt tokens cannot be transferred and therefore do not have their related functions.

User State

IncentivizedERC20

• balance: user's scaled balance

• additionalData: user's last index at which his state was updated

mint

• amountScaled: scale the borrow amount against variableBorrowIndex

• scaledBalance: user's scaled balance

• balanceIncrease: calculate the balance increase due to interest accrued from the previous time interest was calculated for the user till now.

  • additionalData: index at which user's scaledBalance was previously calculated

Update additionalData with the current variableBorrowIndex, to reflect current mint action.

_mint

• increment totalSupply by amountScaled

• increment user's balance by amountScaled

burn

This function is typically called when the user repays his debt, therefore fully or partially reducing his loan. Accordingly, the corresponding amount of variable debt tokens will be burn, reflecting his repayment.

• burn calls _burnScaled on VariableDebtToken.sol.

• _burnScaled scales the burn amount against variableBorrowIndex and calls _burn passing amountScaled.

• _burn is defined on MintableIncentivizedERC20.sol:

  • reduces total supply

  • reduces user's balance

_burnScaled

• scale burn amount against variableBorrowIndex

• balanceIncrease: update user's variable debt balance to bring it in-line with latest index

• additionalData contains the index at which the balance was last updated.

  • this is referenced to calculated balanceIncrease, then subsequently updated

• call _burn, passing scaled amount

• if balanceIncrease > amount :

  • interest accrued outweighs the burn amount

  • emit mint and transfer

• Else amount > balanceIncrease :

  • burn amount outweighs interest accrued

  • emit burn and transfer

Note: InbalanceIncrease > amount, tokens are not actually minted. amountToMint is simply a representation of the remaining interest accrued, less the nominal burn amount.

Essentially, each unit of scaled token represents itself and the interest it has accrued as dictated by the index. Therefore, to account for the interest, the nominal amount is divided by the index to obtain amountScaled.

• Index here refers to variableBorrowIndex

Example

Assume 100 DAI to be burnt:

• amount = 100 DAI

• variableBorrowIndex = 1.1

• amountScaled = 100 / 1.1 = 90.90

With index at 1.1, each token has an interest premium of 10%. So 100 debtTokens is actually worth 110 DAI.

Therefore an estimate of 90.90 debtTokens account for 100 DAI worth of debt.

Note: the actual number of tokens being burnt is amountScaled. This is because debt tokens accrue interest in the same way that ATokens do; against an index.

_burn

• reduce total supply by burn amount

• get user's balance decrement it by burn amount

• apply incentives if defined (.handleAction)