Utila uses Debank for EVM chains, and Step Finance for Solana mainnet, to calculate your wallet's DeFi Position balances.
How DeFi position balances represent value held in your wallet
The balance displayed for a DeFi position represents the approximate real-time value of your assets tied up in that specific position in a protocol. This value is dynamic and changes based on several factors, including:
Underlying asset price fluctuations: The value of the tokens you have supplied or staked will fluctuate with their market price.
Accrued rewards/interest: As you participate in DeFi activities, you typically earn interest, trading fees, or governance tokens. These accrued rewards contribute to the overall value of your position.
Protocol-specific mechanics: Each DeFi protocol has its own unique way of calculating and presenting your position's value, which can include factors like impermanent loss for liquidity providers or liquidation thresholds for borrowers.
Following is how this translates to different DeFi activities.
Liquidity Providing (LP)
When you provide liquidity to a decentralized exchange (DEX) liquidity pool, you typically deposit a pair of tokens. Your DeFi position balance will reflect the value of your share in that pool, including:
Value of deposited tokens: The current market value of the token pair you deposited.
Accrued trading fees: Liquidity providers earn a share of the trading fees generated by the pool.
Borrowing/Lending
In lending protocols, you can supply assets to earn interest (lending) or use deposited assets as collateral to borrow other assets (borrowing). Your DeFi position balance shows:
Value of supplied assets: The market value of the tokens you deposited into the lending pool.
Accrued interest (lending): The interest earned on your supplied assets.
Value of borrowed assets (considered): While borrowed assets reduce your net worth, the balance for your lending position primarily focuses on the value of your supplied collateral and any accrued interest. The protocol typically shows your loan-to-value (LTV) ratio and liquidation price separately.