> For the complete documentation index, see [llms.txt](https://docs.renzofinance.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.renzofinance.com/yield/apr-logic.md).

# APR Logic

The APR shown in the app is the yearly rate a position earns from funding. By default, the app shows the **30-day funding APR**: the hourly funding rate over the last 30 days, averaged and annualized. A **projected APR** is also available, estimating what funding will pay over the next month.

**30-day funding APR (default):**

The 30-day funding APR takes the hourly funding rate over the last 30 days, averages it, and annualizes it into a yearly rate. Because it’s built from real funding rates, it’s the most grounded view of what a position earns. It’s the default figure on each strategy and on the Portfolio page.

It looks backward, so when funding rises or falls, the 30-day figure catches up gradually.

#### Where the yield comes from

Positions earn funding: the payment that traders long the perpetual make to traders short it. Funding is paid every hour, at a rate that moves with market demand. When longs are crowded, the rate rises; when shorts are crowded, it can turn negative.

The APR takes the hourly funding rate and annualizes it into a yearly rate. A 10% APR means that if funding held at that level for a full year, a position would earn about 10% of the deposit.

#### Projected APR

The projected APR looks forward. It takes the funding rate the market expects over roughly the next month, then adjusts it for the share of the deposit that actually earns funding. The figure is recalculated every hour.

**Where the forecast comes from**

The forecast comes from [Pendle Boros](https://boros.pendle.finance), a marketplace where traders trade on a coin’s future funding rate. Each Boros market has an end date, and its price is the funding rate traders expect to average until then, much like a fixed-rate quote for funding.

A Boros market is only used if it’s healthy:

* Its last price was recorded within the past 2 hours
* It hasn’t expired
* It has both buyers and sellers, with prices within 0.5% of each other
* It has at least $250,000 in open interest

If more than one market qualifies, the one ending closest to 30 days out is used. Its price is recorded every hour and averaged over the last 24 hours, so a single odd price can’t swing the number.

**When there’s no Boros market**

Boros covers only a few coins. For all other markets, including every Lighter market, the projected APR falls back to the 30-day funding average. The app shows which source each figure uses.

#### Adjusting for the capital that earns funding

Each deposit is split in two: spot, which buys the coin, and margin, which backs the short that hedges it. Funding is paid on the short, which matches the spot holding in size. Margin earns nothing, so only the spot share of the deposit earns the rate:

**APR = funding rate × L ÷ (L + 1)**, where L is leverage.

**Example:** BTC funding is expected to average 12% a year. At 3x leverage, 3 of every 4 dollars go to spot and 1 to margin, so the APR is 12% × 3/4 = **9%**. A $1,000 deposit would earn about $90 a year before fees.