# PAYE Graph

To incentivize borrowers to use liquidity from our ecosystem to generate as high yield as possible, Stella utilizes a model where the higher the annualized yield, the lower amount to be shared to lenders, and only yields from the leveraged portion are used to calculate the cut.

$$
\text{cut} = 0.25 + \frac{0.75}{\left(1+\frac{\text{Yield}\_{\text{APR}}}{0.25}\right)^2}
$$

Below is a graph illustrating the range of share cuts (Y-axis), which can vary from 25% to 100%, based on the yields generated by leveragoors (X-axis). To navigate through the graph, click [here](https://www.desmos.com/calculator/t2uvixzuw5?embed).

<figure><img src="https://3812384006-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FwKYaramAO33J40rM5uhN%2Fuploads%2F9zv0yx9Z5p8XYDpUN0q5%2Fprofit%20cut%20-%20final.png?alt=media&#x26;token=90083e66-2f55-4ad3-8884-e0b71d025681" alt="" width="563"><figcaption><p>Yield shared to lenders based on a leveragoor's generated yield.  Note that the graph excludes protocol fee deductions from yield shared to lenders.</p></figcaption></figure>

<table><thead><tr><th width="204">Annualized Yield (%)</th><th width="137">% Shared</th><th>To Leveragoors (%)</th><th>To Lenders (%)</th></tr></thead><tbody><tr><td>0</td><td>100</td><td>0</td><td>0</td></tr><tr><td>10</td><td>63.27</td><td>3.67</td><td>6.33</td></tr><tr><td>20</td><td>48.15</td><td>10.37</td><td>9.63</td></tr><tr><td>50</td><td>33.33</td><td>33.33</td><td>16.67</td></tr><tr><td>100</td><td>28.00</td><td>72.00</td><td>28.00</td></tr><tr><td>150</td><td>26.53</td><td>110.20</td><td>39.80</td></tr></tbody></table>

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