ARC: AMPL showing drastically wrong APYs

Made a separate discussion for this as the other one is more about bugs with the graphs, but this is a much more urgent issue and I believe deserves it’s own topic.

Brandon put it best so I will quote his comments here:

"This screenshot shows an APY of 706.18%, but it should be closer to 127,000%.

This is because the contracts and frontend each calculate APY differently. In AAVEs MathUtils there is an over-approximation in the application of the interest rate for computing compounded interest that is not accounted for in the frontend.

Since the contracts determine ultimate behavior, the frontend is quoting incorrect rates. This is not specific to AMPL, as it would be the same for any market with an APY over 50% or so."


I’m glad you created a separate thread, considering the severity of this issue. Borrowers are really getting the short end of the stick because of misinformation.

I know that technically Aave opened up anyone to fix this code, but ultimately the reputation of the site is at stake, and it’s only a matter of time before borrowers do the math only to realize they have been lead astray.


@samvimes thanks for raising, seems to be an urgent issue.

Who would be at risk for misleading investors? As there is no SEC in crypto and highly decentralized, are investors able to file a claim against Aave?

If not - there could not be an urgency to this fix.

Hope angry users is not a scenario we witness.

True there is no regulation over Aave but I feel the reputation of Aave is at risk. Aave is a huge platform and if I’m a whale borrowing millons of ampl at one apy, but it’s really another apy, that could be the difference of millions of dollars. It really makes it hard to trust what’s going on while using Aave and creates a poor user experience

Also there is no disclaimer, any lines of text or anything to at least inform borrowers of the true apy that they are borrowing against.

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Responded in the other thread but will post here as well, now displays the correct rates.


Thank you very much Aave team! Legends!

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Hi @fig
While it is true to say that investors are unlikely to be able to file a claim and I personally sympathize with the concept that code is law, I do also think we have as a group an obligation to fix this particularly as we know about it.
There is also the risk of damaged reputation and loss of trust - incorrect information could turn users to competitors especially if they later find out that the issue was known about and not fixed

It is a very important point about there being no disclaimer
As well as fixing the issue perhaps stating something like
“APY is calculated using on a simple basis and the true APY may be substantially higher due to compounding. Meaning you may pay more to borrow that you expect”
would be a worthwhile improvement