# 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](https://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 Can lent BERA (wBERA) be withdrawn immediately? Lent BERA cannot be withdrawn immediately if all deposited BERA is being used for leveraged farming positions.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.