Interest Rate Model

Lending and Borrowing interest rates are calculated due to Utilisation rate
UtilisationRate=TotalBorrow/TotalLendUtilisationRate = Total Borrow / TotalLendUtilisationRate=TotalBorrow/TotalLend
BorrowingRate=rf+2∗UtilisationRate∗rfBorrowing Rate = rf + 2*UtilisationRate*rfBorrowingRate=rf+2∗UtilisationRate∗rf
rf - risk fee free rate: the rate at which #dev DeFi manages to get from other quasi-risk-free protocols.
Borrowing interest rate model uses the Kick parameter which follows a jump rate model.
BorrowingInterestRate=(max−rKick)∗UtilisationRate/(1−Kick)−(max∗Kick−rKick)/(1−Kick)BorrowingInterestRate = (max - rKick)*UtilisationRate/(1-Kick) 
- (max*Kick - rKick)/(1-Kick)BorrowingInterestRate=(max−rKick)∗UtilisationRate/(1−Kick)−(max∗Kick−rKick)/(1−Kick)
Borrowing interest rate model
Kick: the point in the model where the rate of increase in Borrowing interest rate with respect to Utilization rate is at a higher rate, the value of Kick point is determined at 80%.
rKick - rate at Kick: value of Borrowing interest rate at Kick.
Max: maximum value of Borrowing interest rate which is calculated at 100% Utilisation rate
The return to Lenders is determined as:
LendingInterestRate=BorrowingInterestRate∗UtilisationRateLending InterestRate = Borrowing InterestRate  * Utilisation RateLendingInterestRate=BorrowingInterestRate∗UtilisationRate

GETTING STARTED - Previous

Tokenomics

Next - GETTING STARTED

Liquidation Market

Last modified 8mo ago

Copy link