Lenders will receive higher APY’s when lending for the same borrow rate vs. the current pool. I used nearly identical curves to make the comparison simpler but obviously I’ve proposed making the curve more similar to the sfrxETH curve.
Example:
The current WBTC/FRAX pair currently has a utilization rate of 61.65%, a Lender APY of 10.33% and a Borrow APR of 15.49. There are $2.614m and $1.626m available to borrow. So, total lenders are making $437,785.4: (0.1033 * 4,238,000 )
If the WBTC/sFRAX pair had the same curve but shifted downward 6% (current sFRAX APY) and the same Borrow APR, lenders would be making: $535345.4 = (0.1033 * 4,238,000 ) + (0.06 * 1,626,000) which is roughly 12.63% APY.