How are yields recognised?

Yields are recognised through the harvest process. During this process, we:

• Claim and swap any reward tokens received from the Yield Farm

• Recognise any balance changes (positive or negative)

These changes in the farm balance are logged in a harvest snapshot that can be used for distribution to users at a later date.

In case of earnings, these are either used to decrease the users loan or give the user access to claimable rewards. When there are farm earnings, we also reserve a certain percentage as vault reserve as displayed on the vault information page.

Should the farm have suffered a loss, this is distributed to users in the form of an increase in their loan value. The harvest process is run periodically.

Each harvest is captured in a snapshot that stores key details about yields recognised and the state of the vault at the time.