# Methodology

TELR (Treehouse Ethereum Lending Rate) is a high-frequency, liquidity-weighted index designed to track prevailing lending rates across major DeFi protocols in real time.

TELR Formula can be simplified to:

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## Market Exclusion Criteria

Only lending markets with greater than $5 million in available liquidity are considered. This threshold ensures the index reflects rates from markets with meaningful depth and minimizes the influence of illiquid or volatile pools.

## Weighting Scheme

Rates are weighted based on the proportion of available liquidity in each market relative to the total liquidity across all qualifying markets. This liquidity-weighted approach ensures that more liquid markets exert greater influence on the index.

## Update Frequency

TELR is refreshed every 10 seconds, providing near real-time visibility into lending rate dynamics across the supported protocols and networks.