Frequently Asked Questions

1. How do I lend on Beracana?

• Click on the left-hand sidebar and select “Lend.”

• Choose to deposit either BERA or wBERA.

• If depositing BERA, you must complete an additional transaction to wrap it into wBERA.

2. How do I farm on Beracana?

• Click on “Farms” in the left-hand sidebar at app.beracana.com.

• Select “Create” for the leveraged yield farm you want to deposit in.

• You will be redirected to another page where you can:

  • View the APY (Annual Percentage Yield)

  • Set your leverage level

Note: You can only create a leveraged position if there is available wBERA in the bank. If all BERA in the bank is already used for leveraged positions, you will not be able to borrow.

3. What is the difference between APY and APR?

• APR (Annual Percentage Rate): Represents the simple interest rate applied to an investment over a year, without compounding.

• APY (Annual Percentage Yield): Includes compound interest, meaning earnings are reinvested, leading to higher returns over time.

4. What is Utilization Rate, and how does it affect APY?

• Utilization Rate is the percentage of the total deposited wBERA used for leveraged positions:

  • Formula: Borrowed wBERA / Deposited wBERA

• Impact on APY:

  • Higher utilization → Increases APY for lenders (more demand for borrowing)

  • Lower utilization → Decreases APY for lenders (less demand for borrowing)

5. How is the APY for Lending calculated?

The APY for lending is determined based on supply and demand dynamics within the platform. More detailed calculations may be provided soon.

6. How is the APY for Farming calculated?

• The APR from the base farm is converted into APY, factoring in compound interest. (Beracana compounds every 4 hours.)

• Leveraged APY = 5x the APR (since Beracana allows up to 5x leverage). Example:

  • If the APR for infrared’s wETH/wBERA is 100%, the APY would be 171.46%.

  • At 5x leverage, the APR becomes 500%, which converts to an APY of 14,246%.

7. Can lent BERA (wBERA) be withdrawn immediately?

Lent BERA cannot be withdrawn immediately if all deposited BERA is being used for leveraged farming positions.

You can withdraw your funds when:

• Users close their leveraged positions.

• More users deposit wBERA into the bank.

• If utilization is above 90%, lenders receive an APY of over 100% as an incentive for providing liquidity.

Soon, a canaBERA/BERA LP pool will be introduced, allowing users to withdraw by trading on the LP pool.

8. If I close my farm position (profit/loss), can I withdraw my funds immediately?

• Yes, you can withdraw your funds at any time.

9. What is canaBERA, and how is the reward calculated?

• canaBERA is a receipt token for lending BERA on Beracana.

• It is an interest-bearing token that grows in value over time according to the APY provided by lending.

10. How does liquidation work, and how can it be avoided?

• Liquidation ensures that bad debt does not accumulate.

• If a position value falls below 110% of the borrowed amount, liquidation occurs.

• Example:

  • Collateral: 5 BERA

  • Borrowed Amount: 20 BERA

  • Total LP Position: 25 BERA (converted into wBTC/wBERA LP)

  • Liquidation happens if the LP value drops below 5.5 BERA.

How to avoid liquidation:

• Monitor your Health Factor (should be above 1.05).

• Add more collateral to strengthen your position.

11. What is the optimal condition for farming?

• High APYs for farming

• Low borrowing costs (low APY for borrowing BERA)

• Low utilization rate

12. What is the optimal condition for lending?

• High APYs on the lending page

13. Why can't I open a new position in Farms?

• If the amount you want to borrow is unavailable in the bank, you cannot create a new position. This will be indicated on the dApp interface.

• If you still have issues, create a support ticket on Discord.

14. What are the risks of lending?

• Smart contract risk: Potential for hacks, despite ongoing security audits.

• Liquidity risk: If the utilization rate is close to 100%, withdrawing BERA may be difficult. (A canaBERA/BERA LP pool will soon be introduced to help with withdrawals.)

15. What are the risks of farming?

• Impermanent Loss: If price ratios change significantly, your LP value may drop.

• Leveraged Impermanent Loss: When using leverage, losses can be amplified.

• Liquidation Risk: If the LP position falls below 110% of collateral, liquidation occurs.

16. What is a Health Factor, and how do I use it to manage my position?

• The Health Factor measures collateral vs. position size.

• If the Health Factor drops below 1, liquidation occurs.

• We recommend keeping it above 1.05 by depositing more collateral when needed.

17. Can I open a Farm position with zero liquidation risk?

• Yes! Set leverage to 1x, meaning only your collateral is used. No liquidation risk exists if no funds are borrowed.

18. What assets are currently supported for lending?

• Currently, you can deposit BERA and wBERA.

More assets will be added soon.

19. Why does the APY show as positive, but I'm losing money on the Farm?

• APY measures yield potential but does not account for position value changes.

• If the LP value drops due to impermanent loss, your total position size may decrease, even with a high APY.

20. How does the price of BERA affect my farm size/yield?

• LP value is calculated in BERA.

  • If BERA’s value increases, the amount of BERA needed to pay back loans decreases.

  • If BERA’s value decreases, you are effectively selling BERA at a lower price.