# PnL & Principal Borrowed

Moar shows **profit & loss (PnL)** at the **credit account** level — i.e., across everything inside your account, compared to a simple “HODL my deposits” baseline.

***

### 📊 What you’ll see

* **Unrealized PnL (UPnL):** live gains/losses while funds remain inside your credit account.
* **Realized PnL (RPnL):** the slice you’ve actually locked in.
* **Realized liquidation loss:** any liquidation penalty, fixed at the moment it happens.
* **Principal Borrowed:** how much you’ve borrowed (per pool), excluding accrued interest.

> PnL is **account-level**, not per position.

***

### ✂️ When does PnL get realized?

* **Withdrawals:** ✅ **Yes** — withdrawing locks in a proportional slice of your current UPnL.
* **Repays (internal or external):** ❌ **No** — repaying debt alone doesn’t realize PnL; value is still inside the credit account.
* **Liquidations:** Trading PnL does **not** realize; the **penalty** is booked separately as a **fixed realized liquidation loss** at the time of liquidation.

***

### 🏦 Principal Borrowed (per pool)

* **On borrow:** principal for that pool **increases** by the borrowed amount.
* **Interest accrues** over time on top of principal.
* **On repay:** repayments first cover **accrued interest**; only the remainder reduces **principal**.
* **On liquidation:** the repaid portion reduces debt; after interest is covered, principal drops accordingly.

This is presented per pool (e.g., APT pool, USDC pool) so you can see what you still owe **before interest**.

***

### 🧮 Comprehensive example (with values)

Assumptions (clean numbers):

* Oracle prices: **1 USDC = $1**, **1 APT = $10**.
* **sthAPT** starts 1:1 with APT (value-equivalent).
* Floor rounding on proportional calculations (like the app).

#### 1) Open and leverage

* **Deposit**: $1,000 USDC → Baseline (**TC**) = **$1,000**
* **Borrow**: $2,000 worth of **APT** (200 APT) → **stake** to 200 **sthAPT**
* **Totals (T0):**
  * Total Assets (**TA**): $1,000 (USDC) + $2,000 (sthAPT) = **$3,000**
  * Total Debt (**TD**): **$2,000**
  * Equity/NAV: **$1,000**
  * UPnL = TA − TD − TC = 3,000 − 2,000 − 1,000 = **$0**
  * RPnL = **$0**
  * **Principal Borrowed (APT pool)** = **$2,000**

#### 2) Time passes: yield + interest

* **sthAPT +5%** (now worth $2,100)
* **Borrow interest +$30** → TD = **$2,030**
* **Totals (T1):**
  * TA: $1,000 + $2,100 = **$3,100**
  * TD: **$2,030** (of which principal $2,000, interest $30)
  * NAV: **$1,070**
  * **UPnL: 3,100 − 2,030 − 1,000 = $70**
  * RPnL: **$0**

#### 3) Internal repay (sell sthAPT → APT → repay)

* **Repay**: $400 (funded **from account assets**)
* **Effect**: TA ↓ by $400 (to **$2,700**); TD ↓ by $400 (to **$1,630**).
  * First $30 covers interest; **principal drops** from $2,000 → **$1,630**.
* **PnL**: **not realized** on repay; Baseline unchanged (**TC = $1,000**).
* **Totals (T2):**
  * TA: **$2,700**
  * TD: **$1,630**
  * NAV: **$1,070** (unchanged)
  * **UPnL: 2,700 − 1,630 − 1,000 = $70**
  * RPnL: **$0**
  * Principal Borrowed: **$1,630**

#### 4) Withdraw $300 USDC (PnL realization happens here)

* **Withdraw value (W)**: $300
* **Proportional realization**:
  * Pre-withdraw UPnL = **$70**, NAV = **$1,070**
  * **Realized slice** = floor(UPnL × W / NAV) = floor(70 × 300 / 1,070) = **$19**
  * **RPnL → $19**, **UPnL → $70 − $19 = $51**
* **Baseline scales down** by kept-equity ratio: factor = (NAV − W) / NAV = 770 / 1,070
  * **TC**: floor(1,000 × 770 / 1,070) = **$719**
* **Totals (T3):**
  * TA: 2,700 − 300 = **$2,400**
  * TD: **$1,630**
  * NAV: **$770**
  * **UPnL: 2,400 − 1,630 − 719 = $51**
  * **RPnL: $19**
  * Principal Borrowed: **$1,630**

#### 5) Partial liquidation (fixed penalty, no trading-PnL realization)

* Liquidator **repays R = $500**, **seizes W = $525** (5% bonus)
* **Penalty** = **$25** → recorded as **realized liquidation loss = $25** (fixed).
* **Balances**: TA = 2,400 − 525 = **$1,875**; TD = 1,630 − 500 = **$1,130**
* **NAV**: from 770 → **745** (drops **$25**, matching the penalty)
* **Baseline reduces** by the penalty (proportionally): **TC: 719 − 25 = $694**
* **PnL**: trading PnL **does not realize** on liquidation → **UPnL stays $51**
* **Totals (T4):**
  * TA: **$1,875**
  * TD: **$1,130**
  * NAV: **$745**
  * **UPnL: 1,875 − 1,130 − 694 = $51**
  * **RPnL: $19**
  * **Realized liquidation loss: $25**
  * Principal Borrowed: **$1,130**

> **Takeaways from the example:**\
> • PnL is **not** realized on repay (internal/external).\
> • PnL **is** realized on withdraws (proportionally).\
> • Liquidation penalty is a **fixed realized loss**; trading PnL doesn’t “realize” during liq.\
> • **Principal Borrowed** falls only after interest is covered, so it cleanly tracks the outstanding “original” amount.

***

### 🛡️ Notes

* **Health checks** still gate all outflows — your account must remain healthy after any withdraw or strategy exit.
* **Oracles** value all assets and debts; tiny rounding can appear when scaling the baseline across multiple assets.

***

### 🔗 Related reading

* **Credit Account** — how Credit Accounts work. ([docs.moar.market](/protocol-overview/credit-account.md))
* **Account Health & Liquidation** — health checks and liquidation basics. ([docs.moar.market](/protocol-overview/account-health-and-liquidation.md))
* **Lending Pools** — where borrowing happens & how parameters are set. ([docs.moar.market](/protocol-overview/lending-pools.md))


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