aave-protocol-v2/contracts/protocol/libraries/math/MathUtils.sol

// SPDX-License-Identifier: agpl-3.0
pragma solidity 0.6.12;

import {SafeMath} from '../../../dependencies/openzeppelin/contracts/SafeMath.sol';
import {WadRayMath} from './WadRayMath.sol';

library MathUtils {
  using SafeMath for uint256;
  using WadRayMath for uint256;

  /// @dev Ignoring leap years
  uint256 internal constant SECONDS_PER_YEAR = 365 days;

  /**
   * @dev Function to calculate the interest accumulated using a linear interest rate formula
   * @param rate The interest rate, in ray
   * @param lastUpdateTimestamp The timestamp of the last update of the interest
   * @return The interest rate linearly accumulated during the timeDelta, in ray
   **/

  function calculateLinearInterest(uint256 rate, uint40 lastUpdateTimestamp)
    internal
    view
    returns (uint256)
  {
    //solium-disable-next-line
    uint256 timeDifference = block.timestamp.sub(uint256(lastUpdateTimestamp));

    return (rate.mul(timeDifference) / SECONDS_PER_YEAR).add(WadRayMath.ray());
  }

  /**
   * @dev Function to calculate the interest using a compounded interest rate formula
   * To avoid expensive exponentiation, the calculation is performed using a binomial approximation:
   *
   *  (1+x)^n = 1+n*x+[n/2*(n-1)]*x^2+[n/6*(n-1)*(n-2)*x^3...
   *
   * The approximation slightly underpays liquidity providers and undercharges borrowers, with the advantage of great gas cost reductions
   * The whitepaper contains reference to the approximation and a table showing the margin of error per different time periods
   *
   * @param rate The interest rate, in ray
   * @param lastUpdateTimestamp The timestamp of the last update of the interest
   * @return The interest rate compounded during the timeDelta, in ray
   **/
  function calculateCompoundedInterest(
    uint256 rate,
    uint40 lastUpdateTimestamp,
    uint256 currentTimestamp
  ) internal pure returns (uint256) {
    //solium-disable-next-line
    uint256 exp = currentTimestamp.sub(uint256(lastUpdateTimestamp));

    if (exp == 0) {
      return WadRayMath.ray();
    }

    uint256 expMinusOne = exp - 1;

    uint256 expMinusTwo = exp > 2 ? exp - 2 : 0;

    uint256 ratePerSecond = rate / SECONDS_PER_YEAR;

    uint256 basePowerTwo = ratePerSecond.rayMul(ratePerSecond);
    uint256 basePowerThree = basePowerTwo.rayMul(ratePerSecond);

    uint256 secondTerm = exp.mul(expMinusOne).mul(basePowerTwo) / 2;
    uint256 thirdTerm = exp.mul(expMinusOne).mul(expMinusTwo).mul(basePowerThree) / 6;

    return WadRayMath.ray().add(ratePerSecond.mul(exp)).add(secondTerm).add(thirdTerm);
  }

  /**
   * @dev Calculates the compounded interest between the timestamp of the last update and the current block timestamp
   * @param rate The interest rate (in ray)
   * @param lastUpdateTimestamp The timestamp from which the interest accumulation needs to be calculated
   **/
  function calculateCompoundedInterest(uint256 rate, uint40 lastUpdateTimestamp)
    internal
    view
    returns (uint256)
  {
    return calculateCompoundedInterest(rate, lastUpdateTimestamp, block.timestamp);
  }
}